1 2 3 4 5 6 7 8 9 10 JOHN S . GORDON United States Attorney RONALD L . CHENG Assistan t United States Attorney Acting Chief , Criminal Division MATTHEW E . SLOAN (Cal . State Bar No. 165165) Assistant United States Attorney General Crimes Section 1100 United States Courthouse 312 North Spring Street Los Angeles, CA 90012 Telephone : (213) 894 - 5416 Facsimile : (213) 894-6269 .-'J ....: , : .... , 16 A Fugitive from the Kingdom of Denmark. 17 - ~ ;:,:~ - .. II : ,- I ~:, ,'1 ::J . C,) !J") ("") : FOR THE CENTRAL DISTRICT OF CALIFORNIA MOGENS AMDI PEDERSEN Ti " ~ ;it ) 12 15 :::.~ I') 11 14 ~ -c) Attorneys for Complainant UNITED STATES OF AMERICA IN THE MATTER OF THE EXTRAD IT ION OF r 1'. ..::. UNITED STATES DISTRICT COURT 13 ; ,~- 1..-- . c'1 -"" :J.: -, 0 No . CV 02-02220-GHK (VBK) UNITED STATES' MEMORANDUM OF POINTS AND AUTHORITIES RE EXTRADITION ; DECLARATION OF MATTHEW E . SLOAN ; SUPPLEMENTAL DECLARATION OF POUL GADE DATE : August 19, 2002 TIME : 10 : 00 a . m. 18 19 20 Complainant United States of America , by and through its 21 22 counsel of record , the United States Attorney for the Central 23 District of California , hereby submits the following Memorandum 24 of Points and Authorities and supplemental exhibits in support of 25 II 26 27 28 II - -------_.. - ' - ENTER 0 1 IC~i5 II AC'n 2 4 r1 I . ,,-~- 1 1 2 3 its formal request for extradition , which was filed on March 18, 2002 . DATED : April 22 , 2002 4 5 6 7 8 9 10 11 Respectfully submitted, JOHN S. GORDON United States Attorney RONALD L . CHENG Assistant Unit ~ States Attorney AC/ju/ltf&X::::::;::n MATTHEW E . SLOAN As s istant United States Attorney General Crimes Section 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Attorneys for Complainant United States of America TABLE OF CONTENTS 1 PAGE 2 1 3 MEMORANDUM OF POINTS AND AUTHORITIES 4 I. INTRODUCTION . 1 II. PROCEDURAL HISTORY 2 III. STATEMENT OF FACTS 4 5 6 7 8 9 A. Introduction 4 B. Backround of Foundation and Tvind Organization 6 C. Summary of Charges 9 D. Preliminary Findings of "Substantiated Suspicion" By Danish Courts . 11 Contributions to the Foundation By Tvind Members . 12 Taxation of the Foundation and the Members of Tvind 12 Management of the Foundation: Pedersen's De Facto Control 14 The Actual Distribution of The Foundation's Funds . 14 10 11 12 13 14 E. 15 F. 16 17 G. 18 19 H. 20 1. 21 Payments to IFAS (promotion of research) 15 Payments to La Societe Verte and L'Engergie Eternelle . 16 22 2. 23 24 I. 25 26 27 Summary of Evidence Supporting Charges 18 1. Embezzlement (Count 1) 18 2. Tax Evasion By the Foundation (Count 2) 19 28 i TABLE OF CONTENTS (Ca n t' d.) 1 PAGE 2 3. 3 4 5 III Tax Evasion Through the Filing of Contributor's Individual Tax Returns (Count 3) LEGAL FRAMEWORK AND ARGUMENT 20 21 6 A. 7 8 Applicable Law Concerning Extradition Hearings 1. 9 10 2. 11 21 General Standards and the Elements of Extradition 21 Probable Cause Determination 23 3. Offense Covered by Extradition Treaty 24 4. Inapplicability of Federal Rules of Criminal Procedure and Evidence 27 Testimony By Live Witnesses Is Discouraged 28 6. Limitations on Fugitive's Evidence 29 7. Motivation of Demanding Country : The Rule of Non - Inquiry 30 20 All the Elements for Extradition Have Been Met in this Case 31 21 1. Subject Matter Jurisdiction 31 22 2. Personal Jurisdiction 31 3. Extradition Treaty in Force 31 4. The Fugitive Is Sought for Offenses Covered by the Extradition Treaty 32 There Is Probable Cause to Believe that Pedersen Committed the Offense Charged 33 12 13 14 5. 15 16 17 18 19 23 B. 24 25 26 27 5. 28 II 1 2 IV 35 CONCLUSION DECLARATION OF MATTHEW E. SLOAN 36 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 iii MEMORANDUM OF POINTS AND AUTHORITIES 1 2 I. 3 INTRODUCTION 4 5 The petitioner, Mogens Amdi Pedersen ("Pedersen " ), has been charged by the Danish Ministry of Justice with embezzling DKK 75 6 million (approximately $8.8 million) l from an allegedly 7 8 9 charitable foundation he controls and directing a wide - ranging tax evasion scheme that caused the Danish tax authorities to lose 10 more than DKK 60 million (approximately $7 million) in tax 11 revenues between 1987-2000 . 12 On the basis of these charges, Denmark asked the United States to obtain a provisional warrant 13 for Pedersen's arrest after he was detained by the United States 14 15 Immigration and Naturalization Service ("INS") at Los Angeles 16 International Airport on February 16, 2002 due to an outstanding 17 arrest warrant issued by Interpol In Copenhagen . 18 Denmark's request , the United States filed a Complaint in this 19 20 In response to Court on February 18, 2002, seeking Pedersen's provisional arrest, pursuant to the extradition treaty between the United 21 22 States and Denmark (the "Treaty") . Magistrate Judge Stephen J . 23 Hillman signed the provisional arrest warrant on the evening of 24 February 18, 2002, after which Pedersen was formally arrested by 25 26 27 28 1 DKK is the symbol for "Danish Kroner." As of March 13, 2002, the exchange rate between the Danish Kroner and the U.S. Dollar was roughly 8 . 5 Danish Kroner per US $1. Los Angeles Times, March 13 , 2002 , at C8. 1 1 2 the Federal Bureau of Investigation ( " FBI"). 2 Denmark ' s formal request to the u . s. Department of State for 3 Pedersen's surrender and extradition , supported by the 4 appropriate documents required by the Treaty , was filed with this 5 court on March 18 , 2002 6 (hereinafter " Formal Papers " ). Tho se supporting documents include a copy of the Treaty , a declaration 7 from the Danish prosecutor, and a detailed Case Summary. By 8 9 statute , thi s court must hold a hearing to consider the evidence 10 of criminality presented by Denmark and to determine whether it 11 is "sufficient to sustain the charge under the provisions of the 12 proper treaty or convention ." 13 finds Pedersen extraditable, it certifies that conclusion to the 14 18 U.S . C . § 3184. If the court Secretary of State , who decides whether to surrender him. 15 16 Because the law regarding extradition is sui generis , differing 17 substantially from ordinary criminal or civil proceedings , the 18 United States offers this memorandum as a guide to the nature of 19 the extradition hearing and the application of its distinctive 20 features to the facts of this case. 21 II. 22 PROCEDURAL HISTORY 23 24 25 Pedersen was initially presented before this court on February 19, 2002. At the hearing, Magistrate Judge Hillman 26 27 28 2 The INS transferred custody of Pedersen to the FBI on February 17 , 2002 . 2 ordered that Pedersen be temporarily detained , but requested the 1 2 parties to submit further briefing before he decided whether 3 Pederse n should be detained pend ing the extradition proceed ings . 4 At the subsequent detention hearing on February 22, 2002 , 5 Magistrate Judge Hillman found that no " special circumstances " 6 existed that would warrant Pedersen's release and that Pedersen 7 represented a " serious flight risk," and, accordingly, ordered 8 9 that Pedersen be detained without bond pending his extradition 10 hearing. 11 Order Denying Bail, which was filed on February 26 , 2002 . 12 13 14 Magistrate Judge Hillman subsequently issued a written On March 6, 2002, Pedersen filed a Petition for Rehearing, requesting Magistrate Judge Hillman to hold a new hearing and reconsider his ruling , based on Pedersen ' s claim that he had 15 16 obtained new evidence that purportedly undermined the 17 magistrate ' s initial rul ing . Pedersen ' s Petition was denied by 18 Magistrate Judge Hillman on March 18 , 2002 . 19 On March 7 , 2002 , Pedersen filed a petition with the 20 Criminal Duty Judge to review the magistrate judge's denial of 21 bail on the grounds that (1) the magistrate had allegedly refused 22 23 24 to consider or make any findings on Pedersen ' s constitutional claims and (2) Pedersen's provisional arrest and continued 25 detention were purportedly in violation of the Fourth and Fifth 26 Amendments and the extradition treaty between the United States 27 and Denmark. A hearing was held before the criminal duty judge, 28 3 Judge Nora M. Manella , on March 28, 2002, at the conclusion of 1 2 which Judge Manella orally denied Pedersen ' s petition. Judge 3 Manella subsequently issued a written opinion , explaining her 4 ruling , on April 2, 2002 . 5 Judge Hillman had "clearly and unequivocally found probable cause 6 Judge Manella held that Magistrate to issue the provisional arrest warrant ,U Order at 6 , and that 7 Pedersen's arrest and continued detention were lawful under both 8 9 10 the United States Constitution and the provisions of the Treaty. rd . at 6-15 . On March 18 , 2002, the United States filed the original 11 12 extradition papers and formal request for extradition in this 13 Court , initiating this civil extradition proceeding , Case No. 02 - 14 02220-GHK(VBK) . A status conference was subsequently held before 15 16 17 Magistrate Judge Victor B . Kenton on March 29 , 2002 , during which the Court set the briefing schedule for these proceedings. 18 III. 19 STATEMENT OF FACTS 20 A. Introduction 21 22 Pedersen has been charged by the Danish authorities with 23 abusing his control over an allegedly charitable organization he 24 founded in 1987, called "The Foundation for the Support of 25 Humanitarian Purpos es , the Promotion of Research and the 26 Protection of the Natural Environment U ( " Foundation U), to direct 27 an elaborate embezzlement and tax fraud scheme. 28 4 The charges allege that between 1987 and 2001, Pedersen and several 1 2 associates and high-ranking officials in the Foundation and the 3 "Tvind" organization , a teacher's group that Pedersen founded in 4 about 1970, conspired to illegally divert approximately DKK 75 5 million (about $8.8 million) from the Foundation's coffers to 6 companies or other entities they controlled by claiming that the 7 recipients were legitimate charitable institutions committed to 8 9 humanitarian purposes or the promotion of research or the natural 10 environment. 11 Decl."), Ex . A (Supplemental Declaration of Poul Gade) ("Gade 12 Declo " ) at 13 14 ~~ See Declaration of Matthew E . Sloan ( " Sloan 6 - 9 , 16 ; Sloan Declo , Ex. B ("Case Summary" ) at 1-3 Pedersen and his co-defendants used these proceeds for their own personal gain, including , among other things, by purchasing 15 16 luxury apartments near Miami , Florida and a 170 , 000 hectare 17 plantation in Brazil ; funneling money to commercial enterprises 18 they controlled ; and paying off their personal credit card bills . 19 See , ~ , Gade Decl ., ~~ 37-41 , 48 . 20 21 In addition to enriching himself, Pedersen also caused the Foundation and its contributors -- the individual teacher s 22 23 24 involved in the Tvind organization -- to illegally deduct approximately DKK 155 million from their tax returns by falsely 25 stating that the Foundation was a legitimate charitable 26 enterprise, that was entitled to special tax benefits . 27 Decl. , ~~ Gade 7 - 8; Sloan Decl ., Ex. C (December 11 , 2001 Transcript 28 5 As a result of this widespread from Court in Rinkobing) at 3 - 4. 1 2 fraud , the Danish tax authorities were deprived of about DKK 63 3 million (approximately $ 7.4 million) in tax receipts that were 4 legally owed by the Foundation and its contributors . 5 6 Id . Paul Gade, the lead prosecutor assigned to this case by the Public Prosecutor for Economic Crimes in Copenhagen , has outlined 7 the charges against Mr. Pedersen and the evidence supporting 8 9 those charges in his supplemental declaration. See Gade Decl . 10 This brief summarizes the facts presented in Mr . Gade's 11 declaration , and in the Case Summary prepared by the Danish 12 police and prosecutors in November, 2001, and should be read in 13 conjunction with those documents , both of which are attached 14 hereto . 15 16 17 B. Backround of Foundation and Tvind Organization In approximately 1970 Mogens Amdi Pedersen and a group of 18 Danish school teachers who opposed the educational establishment 19 in Denmark, formed a teacher's community or association , 20 21 sometimes called the Teacher Group ("Laergruppen" or "LG" in Danish) , centered around a folk high school in Western Denmark . 22 23 Gade Decl . , ~ 16 ; Case Summary at 1 - 3. Via the liberal Danish 24 school legislation, which ensures public financial support to 25 private schools , the Teacher Group -- which is also colloquially 26 known as the "Tvind" organization, after the small farm near 27 Ulfborg , Denmark where the movement began -- began opening a 28 6 large number of schools in Denmark and abroad, beginning in 1971 . 1 2 Gade Decl, ~ Over the years, the Tvind 20; Case Summary at 3 . 3 organization has grown dramatically and substantially diver s ified 4 its activities. 5 members in Denmark and an unknown number of members abroad, and 6 At present , Tvind has approximately 400 teacher operates a network of institutions and enterprises, i ncluding 7 factories , commercial plantations, farms, shops, television 8 9 stations , and other enterprises in more than 55 countries . ~ Gade The Danish police estimate that 10 Decl . , 11 the Tvind organization controls assets of several billion Danish 12 Kroner , and generated over one billion Danish Kroner in 1995 13 14 alone . 16; Case Summary at 3. Case Summary at 5 . The members of the Teacher Group have agreed to live in a 15 16 community based on " common economy , common time and common Gade Decl ., ~ 17. In practice this means that 17 distribution . " 18 the management of the Tvind organization , and in particular 19 Pedersen , have absolute c ontrol over the members' private 20 finances , family lives and working lives , and makes all decisions 21 for the members of the Teacher Group . 22 Members of the Teacher Group established the Foundation in 23 24 approximately 1987 after the Danish tax act was amended in 1986 25 to tighten the tax relief criteria for contributions to 26 foundations. 27 the official founders of the Foundation, several high ranking Gade Decl, ~ 20 . Although Pedersen was not one of 28 7 witnesses in the Tvind organization and the Foundation ' s 1 2 management have stated that Pedersen developed the idea for the 3 Foundation and has exercised de facto control over the Foundation 4 and the Tvind organization since their foundation. 5 ~ 6 26 ; Case Summary at 5- 7. Gade Decl . , Hans la Cour Andersen , a former high - ranking member of the Tvind, for example, has stated that "the 7 idea of the Foundation was Amdi [Pedersen's] It was he who gave 8 9 10 birth to the ideas and defined the object. " Gade Decl. , ~ 21 . Although the Foundation was purportedly established as a 11 charitable enterprise to distribute funds to legitimate 12 charitable and research enterprises that would entitle the 13 Foundation and its contributors to special tax benefits , the real 14 purpose of establishing the Foundation was evidently to shield 15 16 Pedersen and his collaborators in the Teacher Group from having To accomplish this goal , Pedersen set up an 17 to pay taxes . 18 elaborate chain of overlapping companies, trusts, and other 19 entities , including offshore bank accounts , whose main purpose 20 was to shield LG's treasury from having to pay any taxes to the 21 Danish authorities and to enrich Pedersen and the top officers in 22 his organization. Peders en explained this objective in a letter , 23 24 dated June 22 , 1995, which stated that the objective of designing 25 LG ' s treasury was to ensure that " the funds are placed so that at 26 any time they are available to us, that they are never available 27 to others , that they are protected from theft , taxation, and 28 8 prying by unauthorized persons, [and] that the joint ownership is 1 2 ensured." Case Summary at 4 . In another letter , also dated June 3 22 , 19 95 , Pedersen addre ss ed his desire to disguise Tvind ' s 4 finances from the authorities by " lay[ing] down a twisted access 5 path with only ourselves as compass holders . " 6 C. Id . Summary of Charges 7 The operative charging document , which was prepared by the 8 9 Chief Constable in Holstebro, Denmark and the Public Prosecutor 10 for Serious Economic Crimes on or about November 28, 2001 , and 11 presented to the Court in Ringkobing, Denmark on December 11 , 12 2001 , charges Pedersen with the following three offenses . 13 Count 1 charges Pedersen with embezzling approximate l y DKK 14 75 mi ll i on from the Foundation between 198 7 and 2001, in 15 16 violation of Section 278 of the Danish Criminal Code and the Gade Decl., ~ 6 ; Ex C. at 17 Foundation's own controlling statutes. 18 2-3 . 19 defendants with causing the Foundation , and various of its 20 21 More specifically, t his count charges Pedersen and h is co- allegedly independent charitable recipients, to transfer funds either directly to Pedersen or to various companies or entities 22 23 controlled by or affiliated with Pedersen and his co-defendants, 24 and to disguise such contributions as legitimate charitable 25 contributions . 26 27 Id . Count 2 charges Pedersen with tax fraud " of a particularly aggravated nature ," in violation of Section 289 of the Danish 28 9 Criminal Code, for causing the Foundation to file false tax 1 2 returns with the Danish taxation authorities, pursuant to which 3 the Foundation illegally took tax deductions amounting to 4 approximately DKK 85 million and thereby avoided paying any taxes 5 between 1987 and 2000. 6 Gade Decl., ~ 7; Ex. C at 3-4. The Foundation's tax returns fraudulently stated that all DKK 85 7 million of these funds were distributed to legitimate charitable 8 9 enterprises, which Pedersen knew to be false. In fact, almost 10 all of these funds were diverted either directly or indirectly to 11 commercial enterprises controlled by or affiliated with Pedersen 12 and his co-conspirators (and used for their personal gain and 13 benefit), or to the Tvind Organization founded by Pedersen . 14 As a result of these illegal, unauthorized deductions, the Danish tax 15 16 17 authorities were deprived of approximately DKK 28 million in tax revenues. Id. 18 Count 3 charges Pedersen with tax evasion of a particularly 19 aggravated nature, in violation of Section 289 of the Danish tax 20 Code, for having caused approximately 300 members of the Teacher 21 Group to submit false tax returns to the Danish taxation 22 23 24 authorities. Gade Decl, ~ 8; Ex. C. at 4-6. The evidence shows that these members contributed a total of approximately DKK 70 25 million to the Foundation between 1987 and 2001 for which they 26 illegally took tax deductions based on assertions in their 27 individual tax returns that the Foundation was a legitimate 28 10 charitable entity , which was entitled to tax privileged 1 2 contributions, pursuant to Sections 8A and 12(3) of the Danish Pedersen, knowing these assertions about the 3 Tax Act. 4 Foundation's tax privileged status to be false, caused staff 5 members of the Teacher Group to prepare these false returns on 6 behalf of LG ' s members (or, at the very least, knew that the 7 Teacher Group , over which he had de facto control , was preparing 8 9 such fraudulent returns for its members) , thus causing the Danish 10 tax authorities to lose approximately DKK 35 million in tax 11 revenues owed by the individual teachers . 12 D. rd. 13 Preliminary Findings of "Substantiated Suspicion" By Danish Courts 14 The charges were formally presented to the Court in 15 Ringkobing, Denmark on December 11, 2001, in order to obtain a 16 warrant for Pedersen ' s arrest and detention pending trial. 17 Ex . C . On December 18 , 2001, the Court in Ringkobing decided 18 19 20 that there was "substantiated suspicion" 3 that Pedersen was guilty of tax evasion of a particularly aggravated nature and ~ 21 that Pedersen was a flight risk . Gade Decl . , 22 Extradition Papers, Ex . B at 31-32 (Order of Court in Ringkobing , 23 December 11, 2001). 11i Formal The Court did not take a position on the 24 25 26 27 28 3 Pursuant to Danish law, "substantiated suspicion" means "objective data, which with considerable strength point[s] to the suspect as ~uilty of the crime with which he is charged ." Gade Decl. , ~ 13 (quoting from Danish legal treatise on Criminal Procedure) . 11 charge of embezzelment in this order because "substantiated 1 2 suspicion" of tax evasion provides a sufficient basis for 3 ordering detention pending trial pursuant to the applicable 4 Danish code . 5 the Court in Ringkobing was upheld by the court of appeals, the 6 Gade Decl ., , 11. The December 11 , 2001 Order of Id.; Formal Extradition Western High Court, on January 15, 2002 . 7 Papers , Ex . B at 48-50 . 8 The evidence against Pedersen was presented to the Court in 9 10 Ringkobing a second time on January 9, 2002, for the purpose of 11 obtaining permission to wire-tap Pedersen . 12 January 23 , 2002 , the Court in Ringkobing upheld its ruling that 13 there was " substantiated suspicion" that Pedersen had committed 14 tax evasion . Id. Gade Decl., , 12 . On This ord er was subsequently upheld by the 15 16 17 Western High Court on January 25 , 2002. E. 20 21 Contributions to the Foundation By Tvind Members The principal source of the Foundation's revenue comes from 18 19 Id . contributions by the members of the Teacher Group . All members of the Tvind agree by written consent to pay 15% of their salaries to the Foundation. Gade Decl ., , 22. From 1987 until 22 23 the present, the members of Tvind have contributed approximately 24 DKK 70 million to the Foundation . 25 F. 26 27 Id. Taxation of the Foundation and the Members of Tvind Under the Danish Tax Code, the Foundation must pay taxes on all donations received from the members of the Teacher Group , but 28 12 it may make deductions for monies expended on public utility 1 2 (\\almennyttige") purposes which are also of a humanitarian 3 nature, or promote research or the protection of the natural 4 environment, pursuant to Sections 4(1) and 4(4) of the Danish 5 Foundation Taxation Act, and Section 12(3) of the Danish tax 6 code. Gade Decl., ~ 23. Based on its false allegations that it 7 was allocating its funds to legitimate charitable and research 8 9 projects, the Foundation has failed to pay any taxes from 1987 to 10 the present, despite receiving over DKK 70 million in 11 contributions and accruing approximately DKK 5 million in 12 interest income from the contributions. 13 14 rd. Similarly, the members of the Teacher Group whom have contributed to the Foundation have taken approximately DKK 70 15 16 million in tax deductions on their individual tax returns, 17 premised on representations that the Foundation was in fact 18 utilizing such contributions for legitimate public utility 19 purposes. 20 defendants were, in fact, using these contributions for their own 21 Gade Decl., ~ 22. Because Pedersen and his co- personal gain, rather than to fund legitimate enterprises 22 23 24 committed to public utility purposes, these deductions which were made on the members' individual returns violated the Danish tax rd. Tvind's Danish headquarters in Grindsted, Denmark 25 code. 26 prepares the income tax returns for its members, pursuant to 27 powers of attorney signed by all the members. 28 13 rd. Therefore, 1 2 Mogens Amdi Peders en , who was the de facto leader of the Tvind, is culpable of aiding and a b etting in the preparation and filing 3 of these fraudulent individual tax returns. 4 G. 5 6 Management of the Foundation: Pedersen's De Facto Contro l Pedersen's de facto control over the Foundation and the Tvind organization are discussed in detail in the Gade 7 8 9 Declaration (Gade Decl . , (Id . at 3-7) ~~ 18 - 19, 26-27, and the Case Summary This evidence demonstrates that, as Hans La Cour 10 And ersen has stated , Pedersen contro l led the activities of the 11 Teacher Gro up " down to t he smallest detail. " 12 H. 13 Gade Decl. , ~ 26 . The Actual Distribution of The Foundation's Funds In the period between 1987 and 2000, the Foundation made 14 15 allocations of about DKK 70 million to twent y -seven different projects . 17 The Danish authorities ' investigation has shown, however , that 18 rather than being spent on legitimate public utility purposes , 19 most (if not all) of these funds have been transferred to 20 See Case Summary at ~ 16 3 . 5 (table listing allocations) commercial companies or other entities , controlled by or 21 22 23 affiliated with Pedersen and his co - defendants, or spent directly on Pedersen's personal nece s sities , including cash transfers to 24 his bank accounts and purchases of apartments in or near Miami, 25 Florida . Gade Decl . , 26 27 ~ 28 . Due to the complexity of the scheme and the ongoing status of the investigation , Mr . Gade ' s declaration and the Case Summary 28 14 address only some of these unauthorized distr i butions, which 1 2 provide a representative sample of the sophisticated embezzlement The Danish author i ties 3 and tax evasion scheme run by Pedersen . 4 intend to produce additional evidence of this fraudulent scheme 5 in their criminal prosecution of Mr . Pedersen after his 6 extradition. 7 1. Payments to IFAS (promotion of research) 8 9 The Foundation paid approximately DKK 20 million to the 10 Institute for Scientific Research and Applied Sciences (IFAS) 11 between 1987 and 1992 . 12 in its tax filings that IFAS was an independent research 13 Gade Decl., ~ 29. The Foundation stated organization , and that IFAS allocated the funds to eight 14 different research proje c ts . Id. A key government witnes s, 15 16 Hans La Cour Andersen , has stated , however, that IFAS was merely 17 a front organization formed by Mr . Pedersen for the purpose of 18 channeling money back to the Teacher Group or to other entities 19 control l ed by Pedersen under the guise of promoting l egit i mate 20 21 research. Id ., ~ 30 . Mr . Andersen ' s statements are corroborated by documents 22 23 found by the Danish authorities during searches conducted in 24 April 2001. These documents demonstrate that the funds from the 25 Foundation were transferred back to the Teacher Group , via IFAS, 26 by disguising the payments as "research costs , " including (i) 27 salaries for " researchers " who had no training and who by virtue 28 15 of their membership in the Teacher Group had waived payment of 1 2 salaries; (ii) consultancy fees for J . F . Parsons Inc . , Cayman 3 Islands , commercial corporation controlled by Mogens Amdi 4 Pedersen, which in fact did not perform any consultancy tasks , 5 and (iii) the cost of leasing a ship for research activities and 6 similar expenses involving transfers to the corporation BB 7 Shipping Ltd , which was also controlled by Pedersen. Gade Decl., 8 9 ~ 31. Payments to La Societe Verte and L'Engergie Eternelle 10 2. 11 From 1991 to 1996 , the Foundation granted approximately DKK 12 13 32 million to two French associations, La Societe Verte and L'Energie Eternelle , Paris, which allegedly were independent 14 associations working in the field of nature protection . Gade 15 16 Decl ., ~33 ; Case Summary, ~ The Foundation asserted in its 3 . 5. 17 Danish tax returns that these French associations spent the funds 18 received on three nature protection projects in Malaysia , Tahiti , 19 and Brazil , respectively . 20 21 The investigation has shown , however , that the French associations were front organizations , founded by or at Pedersen's direction for the purpose of channeling money 22 23 24 25 earmarked for "nature conservation" from the Foundation back to Pedersen or the Teacher Group. Gade Decl . , ~~ 34-41. As an example , the French associations distributed a total 26 of DKK 7 . 99 million to a project in Malaysia, which purported to 27 be involved in rain forest conservation . 28 16 Gade Decl., ~ 35 . In reality , however , most if not all of the funds were used to 1 2 support a commercial saw mill, owned and/or controlled by Mr . 3 Pedersen . 4 to manage this enterprise by Mr. Pedersen, there was no work on 5 nature protection conducted anywhere on the site. 6 Id . According to Steffen Jorgensen, who was appointed Id . The evidence obtained by the Danish authorities similarly 7 demonstrates that the Foundation allocated almost DKK 6 million 8 9 to purchase a biogas plant in Tahiti for a commercial enterprise 10 owned by a personal friend of Mr. Pedersen, and paid almost DKK 11 18 million for a 170 , 000 hectare plantation in Brazil , under the 12 guise that it was a legitimate nature protection and research 13 14 project. Gade Decl. , ~~ 36-37. In fact , the real purpose of purchasing the 170,000 hectare plantation in Brazil was to 15 16 establish a commercial , for profit forestry operation and a self- 17 sufficient residential community for " comrades " in the Tvind 18 organization . 19 20 21 Id ., ~ 38 . In addition to the three "projects" discussed above, the two French associations also distributed approximately US $1 . 7 million for other unauthorized uses between 1991 and 1993 (Gade 22 23 24 Decl., ~~ 43-50), including without limiatation: approximately DKK 3 million to buy a school property for Tvind in Denmark (Id . , 25 ~ 26 controlled by Pedersen (Id., 27 condominium on Fisher Island, Florida for Pedersen ' s personal use 43) i US $95 , 000 in consultancy fees to two consulting firms ~ 47) 28 17 i US $440,000 to purchase a ~ (Id . , 48) i and $25 , 000 to payoff Pedersen's personal American 1 2 Express Account with Sun Bank, Miami . Id. Importantly, none of 3 these payments were recorded in the Foundation ' s or the French 4 associations' financial statements . 5 camouflaged through the preparation of fictitious applications to 6 Instead, the payments were the Foundation and fictitious reports on the application of the 7 funds. Id., ~ 52. 8 9 10 I. Summary of Evidence Supporting Charges The evidence summarized above, and discussed in more detail 11 in the Gade Declaration and the Case Summary , is more than 12 sufficient to establish that Pedersen had de facto control of 13 both the Teacher Group and the Foundation, and to demonstrate 14 probable cause that he committed the offenses of embezzlement and 15 16 tax evasion as charged by the Danish authorities. 17 1. 18 Count 1 charges Mogens Amdi Pedersen with embezzling DKK 75 19 20 Embezzlement (Count 1) million from the Foundation . Danish Criminal Code, Pursuant to Section 278 of the " [a]ny person who , for the purpose of 21 obtaining for himself or for others an unlawfu gain, 22 23 unlawfully spends money that has been entrusted to him" is guilty Gade Decl., ~ 54. 24 of embezzlement . 25 have presented ample evidence that Pedersen and his co-defendants 26 abused their positions of control over the Foundation to 27 Here, the Danish authorities illegally divert monies from the Foundation to corporations or 28 18 other entities controlled by or affiliated with Pedersen. See , 1 2 ~, Gade Decl . , ~~ 28 - 52 . 3 2. 4 Count 2 charges Pedersen with tax evasion for causing the 5 6 Tax Evasion By the Foundation (Count 2) Foundation to furnish the tax authorities with i ncorrect, incomplete or misleading information , in order to justify the 7 illegal deduction of DKK 85 million from the Foundation ' s tax 8 9 returns . Section 289 of the Danish Criminal Code makes it 10 illegal for " [a]ny person who with intent to evade payment of tax 11 to the public authorities gives wrongful or misleading 12 information ... . to be used when deciding on [the] assessment or 13 computation of tax ." Gade Decl., ~57 . The evidence provided by 14 the Danish authorities has demonstrated that Pedersen had de 15 16 facto control over the Foundation and that he caused the 17 Foundation to submit false tax reports that fraudulently claimed 18 that all of the allocations made to IFAS, the french 19 associations, and the Fou n d ation ' s various other recipients were 20 being spent on legitimate public utility purposes . 21 52. Id . , ~~ 28- In fact, however , Pedersen knew that the allocations were 22 23 not being spent on legitimate public utility purposes, and were 24 being funneled back to him and his co-defendants for their own 25 personal use . Id. 26 27 28 19 3. 1 Tax Evasion Through the Filing of Contributor's Individual Tax Returns (Count 3) 2 Count 3 charges Pe d ersen with committing tax evasion by 3 causing the members of the Teacher Group to violate Danish tax 4 5 law by improperly deducting their donations made to the These 6 Foundation on their personal income tax returns. 7 deductions were illegal because , as demonstrated above, the 8 Founda t ion distributed i ts funds to var i ous commercial 9 10 enterprises owned and operated by Pedersen or the Teacher Group -- and in some cases , distributed its money directly to Pedersen 11 12 and his co-defendants . Accordingly, the Foundation was n o t 13 entitled to tax exempt status under the Danish Tax Code and the 14 Teacher Group members were not entitled to deduct these do n ations 15 from their taxable income. 16 17 The evidence has shown that Tvind's headquarters in Grinsted , Denmark prepared these fraudulent income tax returns 18 19 20 for its members , and Pedersen is thus culpable for the filing of such fraudulent returns because he had de facto control over the 21 Tvind organization . 22 III III 23 24 Gade Decl ., " III 25 26 27 28 I II III III 20 17-19 , 22 . III 1 LEGAL FRAMEWORK AND ARGUMENT 2 3 4 A. Applicable Law Concerning Extradition Hearings 1. General Standards and t he Elements of Extradi tion 5 The purpose of the hearing required by 18 U . S.C. § 3184 is 6 7 to determine whether a person arrested pursuant to a complaint in 8 the United States on behalf of a foreign government is subject to 9 surrender to the requesting country under the terms of the If the extradition 10 pertinent treaty and relevant law . 11 magistrate 4 decides that the elements necessary for extradition 12 are present, it incorporates these determinations in factual 13 14 15 findings and conclusions of law styled as a certification of extraditability which is forwarded to the Department of State for 16 disposition by the Secretary of State. 17 the fugitive rests with the Secretary. 18 19 The decision to surrender In order to issue a certificate of extraditability, the extradition magistrate must determine that the following elements 20 are present : (1) the extradition magistrate has jurisdiction to 21 22 conduct extradition proceedings; (2) the extradition magistrate 23 has jurisdiction over the fugitive; (3) an extradition treaty is 24 in force; 25 the applicable treaty permits extradition; and (5) there is (4) the fugitive is being sought for offenses for which 26 27 28 "Extradition magistrate" is a term of art and refers to any judicial officer performing the functions set forth in 18 U . S.C. § 3184 . 4 21 sufficient evidence to establish that the individual appearing in 1 2 court is the fugit i ve who is charged and reasonable ground to 3 believe the accused guilty (the probable cause requirement) . 4 Cornejo-Barreto v . Seifert , 218 F.3d 1004, 1009-10 (9th Cir . 5 2000) i 6 Quinn v . Robinson, 783 F.2d 776, 783 , 790 cert. denied , 479 U.S. 882 (1986) i See (9th Cir . ), Zanazanian v . Un i ted States , 7 729 F . 2d 624 , 625-26 (9th Cir . 1980) i Matter of Assarsson , 687 8 9 F . 2d 1157 , 1159 (8th Cir. 1982) . If these elements are present, 10 the extradition magistrate must certify the extradition, s ee 11 Lopez-Smith v. Hood, 121 F . 3d 1322 12 case falls within an exception explicitly set forth in the 13 treaty, see, 14 ~, (9th Cir . 1997), unless the Quinn v . Robinson , 783 F.2d at 783 (political offense exception in U.S . -United Kingdom extradition treaty). 15 16 When int erpreting an extradition treaty , the extradition 17 magistrate must construe its provisions liberally, in a manner 18 favoring the obligation to surrender fug i tives . 19 Laubenheimer , 290 U.S . 276, 293-94 , 298 , 303, 54 S. Ct . 191 , 78 20 L. Ed. 315 (1933) 21 Cir. 1984) i i See Factor v . United States v. Wiebe, 733 F.2d 549, 554 (8th Cucuzzella v. Keliikoa, 638 F . 2d 105 , 107 n.3 (9th 22 23 24 Cir . 1981) ("treaties should be construed to enlarge the rights of the parties") . Moreover , the obligation to surrender the 25 fugitive to be tried for his alleged offenses " should be 26 construed more liberally than a criminal statute or the technical 27 requirements of criminal procedure." 28 22 Factor v. Laubenheimer , 290 U . S. at 298 . Accordingly , II [f ] orm is not to be insisted upon 1 2 beyond the requirements of safety and justice , II Fernandez v. 3 Philli p s , 268 U . S . 311, 312, 45 S . Ct. 541 , 542, 69 L . Ed . 970 4 (1925), and objections that IIsavor of technicalityll do not find 5 favor in court, see Bing ham v . Bradley , 241 U. S . 511 , 517-18, 36 6 S . Ct . 634 , 60 L . Ed . 1136 (1916) . 7 2. Probable Cause Determination 8 The extradition hearing is not intended to determine whether 9 10 the evidence is sufficient to justify conviction , for that 11 determination will be made by the foreign court that handles the 12 case . 13 See Collins v . Loisel, 259 U . S . 309 , 316 , 42 S. Ct. 469, 66 L . Ed . 956 (1922) ; Quinn v . Robinson , 783 F . 2d at 815; 14 Valencia v . Limbs , 655 F . 2d 195 , 198 (9th Cir . 1981) . The 15 16 extradition magistrate need only determine whether there is 17 probable cause that the fugitive committed the offense or 18 offenses for which extradition is sought. 19 U . S. 502 , 512 , 16 S . Ct . 689 , 40 L . Ed. 787 20 21 Ornelas v . Ruiz , 161 (1896) . In the extradition context , the Ninth Circuit has explicated the probable cause standard as asking II I whether there was any 22 23 evidence warranting the finding that there was a reasonable 24 ground to believe the accused guilty . I II 25 States , 836 F . 2d 1223, 1226 (9th Cir . 1988) , quoting Fernandez v . 26 Phillips , 268 U . S . at 312 ; see also United States ex reI. 27 Sakaguchi v . Kaulukukui, 520 F.2d 726 , 730-31 28 23 Mirchandani v . United (9th Cir. 1975) ("magistrate's function is to determine whether there is 'any' 1 2 evidence sufficient to establish reasonable or probable cause") 3 As to the form of the evidence, extradition is proper where the 4 standard is met even if the proof "is presented . 5 untechnical form according to our ideas. " 6 221 in somewhat Glucksman v. Henkel, u . s. 508 , 512, 31 S . Ct . 7 04 , 55 L . Ed . 830 (1911) (affirming 7 extradition despite minor or technical objections) . 8 9 Flight is a l egitimate ground from which to infer guilt and 10 may be used in the consideration of probable case. 11 Wilkes , 641 F.2d 504, 511 (7th Cir . 1981) . 12 13 3. Eain v . Offense Covered by Extradition Treaty The Treaty provides that the requested state shall extradite 14 a person to the requesting state provided that (1) the laws in 15 16 both states genera l ly provide for a possible penalty of mo re than 17 one year in prison for the crimes charged, and (2) the crimes 18 with which the fugitive is charged are specifically set forth in 19 Article 3 of the Treaty. 20 21 Treaty , Art . 2, 3. This "dual criminality" requirement does not mean that the Danish crime must be identical to the United States offense ; all that i s required 22 23 under extradition law is that the underlying acts be punishable 24 under both legal s ystems by deprivation of liberty for more than 25 one year. 26 not requ i re that the name by which the crime is described in the 27 two countries shall be the same; nor that the scope of liability See Collins v. Loisel, 259 U . S . at 312 28 24 ( "The law does shall be coextensive , or, in other respects, the same in the two 1 2 countries. It is enough if the particular act charged is 3 criminal in both jurisdictions ." ) ; Emami v. 4 for N. Dist. Cal . , 834 F. 2d 1444, 1453 5 United States v . Khan , 993 F . 2d 1368, 1372 6 u . s. District Court (9th Cir . 1987) (same); (9th Cir. 1993) ("Many cases have held that dual criminality is satisfied even though 7 the names of the crimes and the required elements were different 8 9 10 11 in the two countries); Cucuzella v. Keliikoa, 683 F . 2d at 108 ("The crimes need not be identical."). In determining whether an offense is punishable under the 12 laws of both countries, extradition magistrates properly look to 13 the underlying acts to determine whether they violate United 14 States federal law , the law of the state in which the hearing is 15 16 held, or the law of the preponderance of the states . 17 Cucuzzella v. Keliikoa , 638 F.2d at 107; Matter of the 18 Extradition of Manzi , 888 F . 2d 204, 207 (1st Cir. 1989), cert. 19 denied , 499 U.S . 1017 (1990) . 20 21 Here, the government has satisfied both of the Treaty requirements . The Danish Criminal Code provides that the 22 23 24 penalty for embezzlement of a particularly aggravated nature (Count 1) is punishable by incarceration of up to eight years in 25 prison (Danish Criminal Code § 286(2)), and that tax fraud of a 26 particularly aggravated nature (Counts 2 and 3) is punishable by 27 incarceration of up to four years in prison . 28 25 Gade Decl., ~~ 54, 57. 1 2 The penalties under the analogous provisions of United 3 States (and California law) similarly provide for penalties in 4 excess of one year for both embezzlement and tax fraud. 5 U.S . C. 6 § 18 648, for instance, provides for a statutory maximum sentence of 10 years in prison for the embezzlement of any funds 7 entrusted to a custodian by an Act of Congress. See also 18 8 9 U . S.C . § 641 (providing for up to 10 years imprisonment for 10 embezzlement of more than $1 , 000 of United States property) . 5 11 The applicable federal tax evasion statute similarly provides for 12 a pena l ty of up to 3 years imprisonment for aiding, assisting, 13 14 procuring, or otherwise participating in the preparation of a fraudulent tax return. 26 U . S . C. § 7206 . 15 16 Finally , Article 3 of the Treaty provides that both 17 "embezzlement" and "offenses relating to willful evasion of taxes 18 and duties " are extraditable offenses. 19 (24) (B) . Treaty, Art . 3(11), 20 21 22 23 24 25 26 27 28 5 The California Penal Code , similarly , provides for a penalty of over one year in prison for white collar embezzlement offenses similar to those charged against Pedersen here , where the amount of loss exceeds $100,000 . Although the general embezzlement statute, Cal. Penal Code § 506, 514, only provides for a one year sentence for a first time offender like Pedersen , see Cal . Penal Code §§ 489 , 514, the special "white collar enhancement," pursuant to Cal. Penal Code § 186.11(a)(1),(2) , provides for an additional term of punishment of 2 , 3 or 5 years in state prison , for defendants , such as Pedersen , who commit two or more related crimes of fraud or embezzlement, involving the taking of more than $500 , 000 . 26 J 4. 1 2 Inapplicability of Federa l Rules of Crimi na l Procedur e and Evidence The Federal Rules of Criminal Procedure do not apply to 3 extradition proceedings. Fed . R . Crim. P. 54(b) (5) (" [t]hese 4 5 rules are not applicable to extradition and rendition of 6 fugitives. " ) . The Federal Rules of Evidence are also 7 inapplicable . Fed . R. Evid . 1101 (d) (3) 8 inapplicable to "[p]roceedings for extradition or rendition") 9 10 Rather, (rules of evidence "[u]nique rules of wide latitude govern reception of evidence in Section 3184 hearings." Sayne v. Shipley, 418 F . 2d 11 12 679, 685 (5th Cir . 1969) , cert . denied, 398 U.S. 903 (1970) 13 (citation and internal quotation marks omitted). 6 14 hearsay is permitted. 15 Mainero v. Gregg, 164 F.3d 1199, 1206 (9th Cir . 1999) 16 (extradition case: "it is well settled in this circuit that 17 For example, Id.; Collins v . Loisel, 259 U.S . at 317; evidence is not incompetent simply because it is hearsay"); Emami 18 19 v . U.S. District Court, 834 F.2d at 1451 ("In the Ninth Circuit 20 21 22 23 24 25 26 27 28 6 The fugitive in not entitled to the rights available in a criminal trial. See , e . g . , Charlton v . Kelly, 229 U.S . 447, 461, 33 S. Ct . 945 , 57 L . Ed . 1274 (1913); Glucksman v . Henkel , 221 U.S. at 512; United States v. Stockinger, 269 F.2d 681 , 687 (2d Cir.), cert. denied, 361 U.S . 913 (1959). For example, the fugitive has no right to normal discovery , see In re : In the Matter of the Extradition of Michael John Drayer, 190 F.3d 410, 415 (6th Cir. 1999) ; Messina v. United States , 728 F.2d 77 (2d Cir . 1984)), no right to cross-examination if any witnesses testify at the hearing , Messina, 728 F.2d 77, and no right to a speedy extradition , see Extradition of Drayer, 190 F.3d at 415 ; Martin v. Warden, 993 F.2d 824, 825, 829 - 30 (11th Cir. 1993); Jhirad v. Ferrandina, 536 F . 2d 478, 485 n.9 (2d Cir.) , cert . denied, 429 U.S. 833 (1976) . 27 it has been repe atedly held that hearsay evidence that would be 1 2 inadmissible for other purposes is admissible in extradition Indee d , [a ] determination of probable cau se in 3 proceedings. 4 an extradition proceeding may rest entirely upon hearsay . 5 Ryan , 360 F . Supp . 270, 273 6 II ) • II In re II (E . D . N . Y . ), aff'd, 478 F . 2d 139 7 (2d Cir. 1973). 7 5. Testimony By Live Witnesses Is Discouraged 8 Importantly , extradition treaties do not contemplate the 9 10 introduction of testimony of live witnesses at extradition 11 proceedings . 12 very purpose of extradition treaties is to obviate the necessity 13 II [A]n extradition proceeding is not a trial . of confronting the accused with the witnesses against him . The II 14 Mainero v . Gregg , 164 F . 3d at 1207 (internal quotations and 15 16 citation omitted) i see also Bingham v. Bradley, 241 U.S. at 517 17 (requiring li the demanding government to send its citizens to 18 another country to institute legal proceedings would defeat the 19 whole object of the treaty") 20 16 (II i Quinn v. Robinson, 783 F . 2d at 815- [b]arring hearsay from extradition proceedings would thwart 21 one of the objectives of bilateral extradition treaties") . 22 23 24 Accordingly , the United States does not intend, at this juncture, to call any live witnesses at the extradition hearing . 7 25 26 27 28 The United States , however, reserves its right to call 7 such witnesses if Pedersen requests , and the Court grants Pedersen's request , to present live testimony and the United States deems it necessary to rebut such testimony with its own witnesses. 28 Documents offered in evidence at an extradition hearing are 1 2 admissible if they are certified by the principal diplomatic or 3 consular officer of the United States resident in the country 4 requesting extradition. 5 6 18 U.S.C. § 3190 . Limitations on Fugitive's Evidence 6. The fugitive's grounds for opposing an extradition request 7 8 9 are limited. The fugitive is not entitled to introduce evidence that contradicts the evidence submitted by the requesting state, 10 establishes an alibi, or presents a defense such as insanity. 11 See Charlton v . Kelly , 229 U . S. at 462 ; Hooker v . Klein, 573 F.2d 12 1360, 1368-69 (9th Cir.), cert. denied , 439 U.S. 932 13 Desmond v. Eggers , 18 F . 2d 503, 505 (9th Cir. 1927) . (1978); Nor maya 14 fugitive offer evidence to argue that he had no motive to commit 15 16 the crime . Extradition of Mainero, 990 F. Supp . 1208, 1221 (S.D. 17 Cal . 1997) . 18 relevant at an extradition hearing. 19 at 462 ; Lopez-Smith v . Hood , 121 F.3d 1322. 20 21 Nor is a fugitive's competenc e to stand trial Charlton v. Kelly, 229 U.S . Rather , the fugitive is entitled only to offer evidence that explains or clarifies the proof . Hooker v . Klein, 573 F . 2d at 1368 ; Eain v. Wilkes, 641 22 23 F.2d at 511. Hence, the extradition magistrate does not weigh 24 conflicting evidence and determine what to credit, 25 determines only whether there is competent evidence to support 26 the belief that the accused has committed the charged offense . II 27 Quinn v . Robinson , 783 F . 2d at 815. 28 29 "but, rather, 7. 1 2 Motivation of Demanding Country: The Rul e o f NonI nquiry The court should not look behind the extradition request 3 into the motives of the government of the requesting country. As 4 S 6 the court stated in In re Lincoln, 228 Fed. 70, 74 (E.D . N . Y . 1915) : [I]t is not a part of the court proceedings nor of the hearing upon the charge of crime to exercise discretion as to whether the criminal charge is a cloak for political action, nor whether the request is made in good faith. Such matters should be left to the Department of State. 7 8 9 10 11 Accord Quinn v . Robinson, 783 F . 2d at 789 ; see also In re 12 Gonzalez, 217 F. Supp. 717, 722 n.lS (S.D.N . Y. 1963) 13 § (18 U . S.C . 3184 gives the court no authority to inquire into such 14 matters) . IS 16 Thus, extradition magistrates generally should not examine 17 questions concerning the judicial procedure in the 18 requesting state or the treatment that might be accorded the 19 fugitive after extradition . 20 21 See Cornejo-Barreto v. Seifert , 218 F.3d at 1009 n . S (rule usually requires extradition courts to refrain from inquiring into foreign justice 22 23 systems); Lopez-Smith v . Hood, 121 F . 3d at 1327 (courts 24 generally refrain from examining penal systems of requesting 2S nations); Arnbjornsdottir-Mendler v . United States, 721 F . 2d 26 679, 683 27 matters are to be determined solely by the executive (9th Cir . 1983) (" The rationale is that such 28 30 branch."); accord Matter of the Extradition of Manzi , 888 1 F . 2d at 206. 2 As Justice Holmes said, "[w]e are bound by the 3 existence of an extradition treaty to assume that the trial 4 will be fair." 5 B. 6 Glucksman v. Henkel, 221 U.S. at 512. All the Elements for Extradition Have Been Met in this Case In the present case, the elements for extradition have been 7 8 9 met. There is subject matter and personal jurisdiction over the fugitive . A valid extradition treaty permits extradition for the Finally , there 10 offense charged against the fugitive in Denmark. 11 is probable cause to believe that the fugitive committed the 12 offenses charged . 13 1. Subject Matter Jurisdiction 14 15 16 17 18 19 20 United States Magistrate Judges are authorized to act in extradition matters. See 18 U.S . C. § 3184; Matter of Assarson, 687 F . 2d at 1159. 2. Personal Jurisdiction A magistrate judge in the Central District of California has jurisdiction over Pedersen because he is presently in custody In 21 22 23 24 25 26 27 that district . Extradition of Mainero, 990 F . Supp. at 1216 . Pedersen is llfound within [this ] jurisdiction," the jurisdictional requirement of 18 U . S . C. 3. § 3184. Extradition Treaty in Force There is an extradition treaty in full force and effect between the United States and Denmark . 28 31 See 18 U.S . C . § 3181 (Historical and Statutory Notes) ; Sloan Decl., Ex . D (Declaration 1 2 of Cynthia Stewart Francisco , Attorney Advisor in the Office of 3 the Lega l Adviser for t h e Department of State) , ~ 3 . 4 applies to offenses committed before as well as after the date of 5 its entry into force. 6 The Treaty Treaty , Art. 20. The State Department ' s conclusion that the treaty is in full 7 force and effect, as expressed in the Declaration of Cynthia 8 9 Stewart Francisco , is entitled to considerable deference . 10 Kolovrat v. Oreg on , 366 U . S . 187, 194 , 81 S. Ct. 922 , 6 L . Ed. 2d 11 218 (196 1 ) 12 meaning given them by the departments of government particularly 13 14 ( "While courts interpret treat i es for themselve s, the charged with the ir negotiation and enforcement is given gre at weight ." ); accord Sumitomo Shoji America , Inc. v. Avagliano, 457 15 16 U . S. 176, 184, 102 S . Ct. 2374, 72 L. Ed 2d 765 (1982) ; Charlton 17 v . Kelly , 229 U . S . at 468 ; see also Extradition of Mainero , 990 18 F . Supp . at 1216 (giving deference to State Department ' s opinion 19 that extradition treaty was in full force and effect) . 20 21 22 23 24 4. The Fugitive Is Sought for Offenses Covered by the Extradition Treaty As noted earlier in t his memorandum, the Treaty states that an offense shall be extraditable if it is specifically governed by the Treaty and if it is punishable under the laws in both 25 contracting parties by deprivation of liberty for a period of 26 27 28 more than one year. Treaty, Art . 2, 3 . The charges of embezzlement and tax eva s ion of a particularly aggravated nature 32 brought against Pedersen by the Danish authorities satisfy both 1 2 3 4 of those standards, as demonstrated in Paragraph III (A) (3) , supra. 5. 5 6 There Is Probable Cause to Believe that Pedersen Committed the Offense Charged The treaty requires that an extradition request be supported 7 by "such information as would justify the committal for trial of 8 the person if the offense had been committed in the Requested 9 10 State . " Article 8 (3) (c) . This language means that the federal probable cause standard is the applicable criterion. See Emami , 11 12 13 834 F.2d at 1447; Eain v . Wilkes , 641 F.2d at 507 - 08. The facts summarized above and set forth in the supplemental 14 declaration of Poul Gade and the Case Summary attached hereto, 15 and the formal extradition papers filed by the United States on 16 March 18 , 2002 , provide overwhelming evidence that Pedersen 17 violated the Danish embezzlement and tax evasion statutes, and 18 19 20 21 are therefore more than sufficient to establish the relatively low threshold of probable cause. There is also probable cause to believe that the person 22 before the court is the person named in the Danish arrest 23 warrant . 24 1) This is based on the following: Name/Passport Identification . The names are identical. 25 The person before the court is "Mogens Amdi Pedersen." 26 27 28 Importantly, the fugitive admitted to his true name at the time of his initial presentment before Magistrate Judge Hillman on 33 February 19, 2002. Moreover, the fugitive also presented a 1 2 passport in the name of "Mogens Amdi Pedersen" to the passport 3 control officers when he was apprehended in Los Angeles 4 International Airport in February 2002. 5 6 2) Sloan Decl . , ~ 7 . Facial appearance/photo identification. The photo provided to Interpol by the Chief Constable in Holstebro, Denmark 7 plainly depicts the person who is before the court. Sloan Decl., 8 9 Ex. E at 2. Moreover , the physical description of Mogens Amdi 10 Pedersen provided in this Interpol arrest warrant 11 skin; 198 cm tall; slender build; blue/grey eyes; thin- 12 haired/high forehead; wears glasses) clearly matches the physical 13 14 features of the fugitive . ( " male; white Sloan Decl . , Ex. E at 1. Although this court should make this finding in its own right, the United 15 16 17 States notes that the United States Magistrate Judge who presided over Pedersen's initial appearance found Pedersen to be the 18 person identified in the Danish arrest warrant and Pedersen did 19 not contest his identity at that hearing . 20 21 3) Date of Birth. The date of birth for the Mogens Amdi Pedersen before the court, see Pretrial Services Report at 2, is 22 23 24 25 identical to the date of birth for the Mogens Amdi Pedersen sought by the Danish authorities and listed in Interpol arrest warrant: January 9 1939. Ex . E at 3. 26 27 28 34 IV 1 CONCLUSION 2 3 4 5 For the foregoing reasons, the United States requests the certification of the fugitive, Mogens Amdi Pedersen, for extradition to Denmark because each of the elements required for 6 extradition has been met . 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 35 DECLARATION OF MATTHEW E . SLOAN 1 I, Matthew E . Sloan, declare as follows : 2 3 1. I am an Assistant United States Attorney for the 4 Central District of California, and am currently assigned to 5 handle matters relating to the extradition request made by the 6 Kingdom of Denmark regarding Mogens Amdi Pedersen ( " Pedersen") 7 I make this declaration in support of the United States' 8 9 10 Memorandum of Points and Authorities Re : Extradition. 2. Attached hereto as Exhibit A is a true and correct copy 11 of the Supplemental Declaration of Poul Gade, the lead Danish 12 prosecutor on this matter, dated April 22, 2002 13 Declaration") . ( "Gade The original, signed copy, complete with ribbons 14 and seal , will be filed with the Court forthwith as soon as it 15 16 17 has been received through the diplomatic channel. 3. Attached hereto as Exhibit B is a true and correct copy 18 of the " Case Summary," prepared by the Danish authorities, a copy 19 of which was previously filed with the United States' formal 20 21 extradition papers on March 18, 2002. See Filing of Original Formal Extradition Papers, Ex . B at 53-84 . 22 23 4. Attached hereto as Exhibit C is a true and correct copy 24 of the transcript from the December II, 2001 hearing before the 25 Court in Ringkobing , Denmark , a copy of which was previously 26 filed with the United States' formal extradition papers on March 27 18, 2002 . See Filing of Original Formal Extradition Papers , Ex. 28 36 B at 33 - 47 . 1 2 5. Attached hereto as Exhibit D is a true and correct copy 3 of the Declaration of Cynthia Stewart Francisco , a copy of which 4 was previously filed with the United States' formal extradition 5 papers on March 18, 2002 . 6 See Filing of Original Formal Extradition Papers, Ex . A . 7 6. Attached hereto as Exhibit E is a true and correct copy 8 9 of the Interpol Warrant / Search Request for Mogens Amdi Pedersen ' s 10 arrest , a copy of which was previously filed with the United 11 States' formal extradition papers on March 18, 2002. 12 of Original Formal Extradition Papers , Ex. B at 51. 13 14 7. See Filing I have been informed by representatives from the FBI that when the fugitive Pedersen was detained at Los Angeles 15 16 International Airport on February 16 , 2002, he was carrying a 17 passport for Mogens Amdi Pedersen that had the same passport 18 number, date of birth and other personal identifying information 19 as the Mogens Amdi Pedersen sought by the Danish authorities . 20 21 8. I declare under penalty of perjury that the foregoing is true and correct and that this declaration was executed in Los 22 Angeles, California on this 22nd day of April, 2002. 23 24 25 26 27 MATTHEW E . SLOAN Assistant United States Attorney 28 37 .J DECLARATION OF POUL GADE 1, Paul Gade, hereby declare: T.lntcodu('.tiQn 1. T am a Danish citizen resident in Aarhus, Denmark. I have previously made a declaration dated 14 March 2002 to the United States District Court, Central District of California in connection with the proceedings for the extradition of Mogens Amdi Pedersen. 2. 1 can declare that in 1988 1 graduated from Aarhus University with a degree in law. 1 have experience as an attorney-at-law with authorization to plead before tile Danish High Courts and as a lecturer at Aarhus University, from which I received a Ph.D. in law in 1996. In 1996, I was appointed deputy public prosecutor at the Public Prosecutor for Serious Economic Crime, Copenhagen. I am assigned to assist the criminal police in their invcstigations and to act as a prosecutor in cases involving economic crime. 3. I am the leading prosecutor in the case against MQgcn~ Amdi Pedersen et aI, which for the time being is pending in the Court in Ringk0bing, Denmark. 1 have prepared this declaration on the basis of my personal knowledge of the invcstigation of the case, the charges brought, and the evidence supporting the charges of embezzlement of a particularly aggravated nature. and of tax evasion of a particularly aggravated nature. If 1 were to be summoned as a witness I could and would competently testifY as set out in the following. n. Charges brought Summary of charges against Mogens Amdi Pedersen 4 . On 2 March 2001, the Chief Constable brought charges against Mogens Arndi Pedersen et. al. for violation of section 280 and 289 of the Danish Criminal Code (abuse of funds and tax evasion). The charges were presented to the Court in Rirtgkabing for the pUIpose of obtaining a warrant for carrying out searches at the residences in Denmark of Pedersen and his co·defendants. In its order of 5 April 2001, the Court in Ringkebing (Judge Steen LCiWbjerg Nielsen) found thal there were "reasonable grounds" for suspecting Pedersen of tax evasion and consequently issued warrants for the requested searches. I have received a certified transcriPl of the Court's order. On 11- August 2001, this order was upheld by the Danish Westcm EXHIBIT ;4- mnua mam High Court (High Court Judges Hove, Bj~rnskov Jensen and Larsen). I have also personally received certified transcripts of the Court records concerning these order1$. 5. On 28 Noyember 200 I The Chief Constable of Ho1!;tebro filed an amended charging document against Mogens Amdi Pedersen, charging him with three separate offenses. 6. Count 1 of the charging document charges Mogens Amdi Pedersen with huving embezzled approximately DKK 75 million from "TIle Foundation for the Support of Humanitarian Purposes, the Promotion of Research, and the Protection of the Natural Environment" (the "Foundation"), an allegedly charitable organization controlled by Pedersen and his co-defendants, in violation of section 278 of the Danish Criminal Code and the Foundation's own controlling statutes. More specifically, this count charges Pedersen and his co-defendants with having abused their positions of trust and control over the Foundation's finances by illegally disbursing the Foundation's funds either directly to Pedersen and his co-dcfendants for their personal use and consumption, or to various commercial ventures, institutions or organizations controlled by or affiliated with Pedersen and his co-defendants, under the pretext of making contributions to legitimate public utility ("almenn.yttige") enterprises. 7. Count 2 charges Mogens Arndi Pedersen with tax evasion of a particularly aggravated nature, in violation of section 289 of the Danish Tax Control Act, for having caused the Foundation to file false tax returns with the Danish taxation authorities, pursuant to which the Foundation illegally took tax deductions amounting to approximately DKK 8S million betwcen 1987 and 2000. The Foundation' s tax returns staled that all DKK 85 million of the Foundation's revenues were distributed to legitimate charitable enterprises or other entcrprises committed to public utility, which Pedersen knew to be false . In fact, most if not all of these monies were distributed to commercial enterprises or other entities controlled by or affiliated with Pedersen and h is codefendants. As a result of these illegal, unauthorized deductions, the Danish tax authorities were deprived of approximately DKK 28 million in tax revenues. 8 . Count 3 charges Mogens Amdi Pedersen with tax evasion of a particularly aggravated nature, in violation of section 289 of the Danish Tax Code, for having caused approximately 300 members of the Teacher Group (sometimes referred to hereinafter as "LG" for "Ltzrer Gruppen"), controlled by Pedersen, to subniit false tax. rcturns to the Danish taxation authorities. The evidence shows that these members contributed a total of approxi.mately DKK 70 million to the Foundation between 1987 and 2002 for which they illegally took tax deductions based on assertions in their individual tax returns that the Foundation was a legitimate charitable entity, which was entitled to tax privileged contributions, pursuant to sectio~ 8A and 12(3) of the Danish Tax Assessment Act. Pedersen, knowing these assertions about the Foundation's tax privileged status to be 2 if false, caused staff members of the Teacher Group to prepare these false returns on behalf of LG ' s members (or, at the vcry least, knew that the Teacher Group, which he controlled, was preparing such false returns) , thus causing the Danish tax authorities to lose approximately DKK 35 million in tax revenues owed by th e individual teachers. Conspiracy to commit tax evasion and embezzlement 9. Based on the evidence, which is only mentioned in brief outline in this declaration, charges have been brought against Mogens Amdi Pedersen and six executive employees in the Tvind organization, who "jointly and according to prwious agreemenf' have made an arrangement whereby tbe taxable income of the .members of the Teacher Group is wrongfully made tax-free through donations to the Foundation. In addilion , these persons have jointly made an arrangement whereby the Foundation has wrongfully failed to pay any taxes on these donations to the Foundation. Lastly, Pedersen and his co-defendants have arranged for the Foundation funds, which are earmarked for public utility purposes, to be transferred to the free disposal of Pedersen or to corporations etc in the Tvind organization. According to section 23 of the Danish Criminal ~, any person who "has contributed to the execution afthe wrongful act by instigation. advice or action" may be found culpable for committing the underlying offence. This means that under Danish law any one aiding and abetting in the commission of a crime will incur the same crimina1liability as the principal. The co-defendants J O. According to an amendcd charging document, fIled by the Chief Constable of Holstebro 25 Januaxy 2002 Pedersen's co-defendants are: (1) Kirsten Larsen. Pedersen's spouse and partner in the top management of LG. (2) Stcn Byrner, (3) Ruth Sejer0e-Olsen and (4) Marlene Gunst. who are or were Pedersen's closest accomplices in " LG's finance". From 1987 - 1992 Sten Byrner was in charge of this office, from 1992 2001 Marlene Gunst and Ruth Sejcr0e-Olsen were in charge. (5) RadiI Ross Swensen was Chainnan of the Foundation from 1987 - 1993, (6) Paul J0I'gensen from 1993 -- 2001 . Charges presented in Court I L The charges of 28 November 200 I were formally presentcd to the Court in Ringkabing (Judge Sten L0'vbjerg Nielsen) on 11 December 2001 wilh a view to obtaining a warrant for Pedersen's arrest and detention pending trial. By order of 18 December 2001 the Court in Ringloobing decided that thcre was "substantiated suspicion" that the suspect was guilty of tax evasion of a particularly aggravated nature and that Pedersen was a flight risk. Judge Nielsen consequently ordered that Mogens Amdi Pedersen was to be 3 arrested and arraigned in court within 24 hours after his arrival in Denmark. The Court did not take a position on thc charge of embezzlement by this order because "substantiated suspicion" of tax evasion provides a sufficient basis for ordering detention pending trial pursuant to section 762(1) of the Danish Administration of Justice Act. The Court of Ringkabing order of 18 December 2001 was upheld by the Western High Court (High Court Judges Have, Bj0rnskov Jensen and Larsen) on 15 January 20.02. r have personally received certified transcripts of these court orders. 12. The evidence against Mogens Amdi Pedersen was again presented to the Court in Ringk0bing on 9 January 20.02 for the pmpose of obtaining permission for wire-tapping. By order of 23 TanuarY 20.02, the Court in Ringkabing (Judge Nielsen) upheld its ruling that there was "substantiated suspicion", as previously found. This order was upheld by the Western High Court (High Court Judges Bertung, Parbo and Estrup) on 25 January 2002. 1 have personally received transcripts of the court records from the Court in Ringk0bing and the Western High Court concerning these two orders. "Substantiated suspicion" in Danish law 13. As can be seen, both the Court in Ringk0bing and the High Court have found there to be "substantiated suspicion" that Mogens Amdi Pedersen is guilty of - at least - tax evasion. In Danish legal literature the tenn "substantiated suspicion" is explained as follows: "(There) must be objective data. which with considerable strength point to the suspect as guilty of the crime with which he is charged" (Bernhard Gomard: Straffeprocessen ("Criminal Procedure''), Copenhagen 1976, page 290). III. Case Summary all on 1 Noyember 2001 14. The objective evidence in this case pointing to Mogens Amdi Pedersen's guilt has been summarized in "Case Summary as on 1 November 2001" ("The Case Summary"), a copy of which was attached to the United .States' formal request for extradition at 53. I am personally acquainted with all the documents mentioned or quoted in the Case Summary, and I can· declare that this evidence is correctly quoted or reproduced in the Case Summary. The Case Summary is based on documents and on examinations of several witnesses with personal knowledge of the case. This declaration cites to several of those documents below. Exhibit numbers refer to the case documents which have been produced to Mr. Pedersen's Danish defense counsel. 15. Further, I have personally been informed by the Danish investigaton; who have examined witnesses in this case that (i) the written reports of the examinations they conducted are true and precise transcripts of the 4 statements of the witnesses, and (ii) that these witnesses have individually confirmed their statements by signing the written reports. I can declare that the reproductions of the statements in the Case Summ~ are true and precise transcripts of the written reports. (The examinations mentioned in paragraphs 36 and 53, however, were made by the French police in Paris and on Tahiti, not by Danish investigators) . To supplement the Case Summary, T declare as follows: TV. Backgroupd: M02egs Amdi Pedersen's role in the Tvind organization The Tvind organization 16. The Tvind organization was established by Mogens Amdi Pedersen around 1970. During the initial period the organization founded and operated schools in Denmark. Today the organization is operating in at least 5S countrit:s. The activities of the organization comprise, among other things, school operations in Denmark and a number of oilier countries, used clothing collections allegedly for charitable ("velgfJrende") purposes, operations of plantations, farms, saw mills, manufacture of clothing and shoes, trade in products manufactured by the organization, aid to poor people in Third World countries. "Fondcn til stf,~ia: A total amount of DKK 7,999,860 was allegedly paid to the Malaysia project. Rather than supporting rain forest conservation, the Foundation's funds have been used to support a commercial sawmill owned by the Tvind organization. Steffen Hjalmar Jergenscn, who was appointed manager of the business in Malaysia by Mogens Amdi Pedersen, stated to the police that the sawmill was owned by South China Sea Farming Ltd. A document found in the search at the Tvind Headquarters in Grindsted, Denmark, demonstrate that this corporation is controllcd by Pedersen, c£ Exhibit 35-5-43 p. 8. Kjrsten Larsen and Pedersen issued instructions about the operations and visited the business, for example, for inspection ptuposcs, cf. Exhibit 35-5-4 p. 1. According to J0rgensen; there was no work on nature protection conducted on the site, ef. Steffen Hjalmar J0rgensen's statement, Exhibit 54-14 pp. 7-9. Indeed., Pia Madvig. who wa" sent to Malaysia by Pedersen to manage the corporation's accounts, has stated that she did not even know that she was particjpating in a nature conservation project supported by the Foundation (Exhibit 54-17 p . 2). She stated that the project was a commercial one and was to yield a profit for LG's funds (p. 4). She did not know that she was registered as manager of the applicant corporation South China Sea Farming Ltd. b: Biogas plant, Tahiti 36. Re (b) Tahiti: The Foundation's tax returns also state that La Societe Verte distributed a total amount of DKK 5,948,795 tor a biogas plant on Tahiti, and that these funds were spent on nature protection. The investigation has shown., however, that these funds have actually been used to support a private, commercial enterprise, owned and operated by Fernando Stejn. Mr. Stein has informed the French police that he is a personal friend of Mogens. Amdi Pedersen. The construction of a biogas plant on his property was necessary to prevent the French authorities from closing down his polluting farming business (cf. Exhibit 54-21 pp. 34). Mr. Stein's statement is supported by a statement from Walther Juul Hansen, a former member of the Teacher Group (Exhibit 54-9 p. 4). The evidence demonstrates that these funds were provided to an individual, who carries on commercial activity. Therefore these payments are unlawful because they were not distributed to a genuine "public utility". c: Br:azil (the Fa:lenda Jatoba plantation) 37. Re (c) Brazil: In 1993, La Societe Verte applied for funds to establish a nature protection project on a 170,000 hectare plantation in Brazil. The Foundation informed the Danish taxation authorities that this was a nature protection and research project comprising ecologically sustainable forestry, farming and production of electricity. A total amount of DKK 17,981,925 was allegedly paid to the project in Brazil. 11 '11 38. The police investigation has proved that the plantation was purchased by a corporation, Floryl Florestadora Lda., controlled by Mogens Amdi Pedersen, cf. Exhibit 35-5-43 p. 20, with the funds allocated by La Societe Verte. The real purpose of the purchase of the plantation was to eSlablish cOIIUl1ercial forestry operations and a self-sufficient residential community for "comrades in LG". 39. It was Pedersen personally who took the decision to buy the plantation in BraziL This appears from Pedersen ' s letter of 8 January 1993 (Exhibit 35-5- 8 p. 1) to a close employee: "For we must, 1 repeat we must have that property. We will be put years ahead in our efforts to achieve a goal that will be supported by the entire LG" .. According to the document, this goal is the establishment of a self-sufficient COIIlil1unity on the plantation for "comrades from LG" (Exhibit 35-5-8 p. 2). Pedersen's letter of 19 September 2 000 (Exhibit 35-5-28 p. 1) to a number of his closest accomplices states that the objective of the Tvind organization's purchase of the plantation is: "a. To retain the ownership of this magnificent piece of land in ordf::r Lo passively reap the value that the increases in value represent; b. continue the thinning [of the forest} as a basis for large-scale production training .. c. harvest at the right time, followed by planting". 40. The evidence demonstrates, in short, that the plantation in Brazil is a commercial business. No ''nature protection project" is conducted on the plant~tion. The investigations carried out by the taxation authorities in Brazil in 1999 at the request ofthe Danish taxation authorities reached the same conclusion. The Brazilian authorities concluded (Exhibit 56-4-8 p. 4): "This enterprise is an ordinary commercial company. Jl does not qualifY for any special tax treatment". 41. The plantation in Brazil is managed by Pedersen pe~onally. This appears from Steffen Jl1lT1;ren~en 's statement to the police, Exhibit 54-14 p . 11.J0rgensen had a managerial function on the plantationin 1993 . He also explained that he was not aware that work was being carried out on a nature conservation project paid for by the Foundation on the site. That Pedersen manage~ the plantation is supported by a number of documents e.g. Exhibit 35-5-28 pp. 2-3, according to which Pedersen appoints a new management of the plantation and draws up budget and production targets in September 2000. In this letter Pedersen sets the goal that productivity must be increased by 200%, the wages must be cut by 62% of the present wages, the debt must be liquidated and the accountancy must be revised so "one can see that there is a profit". d. Disguised payments from the French associations 42. Tn all the cases mentioned above there is proof that the Foundation's payments to the French associations were made for unlawful purposes in contravention of the Foundation's bylaws and the tax legislation and in 12 a such a way that the funds received were placed at the free disposal of Magens Amdi Pedersen. In addition, the three nature protection projects have not actually received the funds set out in the accounts. The evidence quoted below shows that a very large portion of the funds allegedly paid to the French associations werc, in fact, applied for other, unauthorized purposes, including: 43 . In 1991, La Societe Verte distribulcd DKK. 3,000,000 (approximately USD 350,000) to buy the school property "Lysh.0j" in Denmark_ The Foundation's accountant, Erik Jensen, complained about this purchase in a letter of 30 July 1992 to Poul J0rgensen. who was responsible for the administration of the Foundation (cf. Exhibit 56-3-1-5 p. 71): "J find itparlicularly difficult to see how a down payment oj 3 million Danish kroner on a property (in Denmark) can become a rain jorest in the Far East_ Haven 't you got something that will put somejlesh on these money transfers .... 44 _ In 1991 and 1992, La Societe Vertc distributed a total amount of approximately FF 2 million (approximately OSD 220,000) to Kirchheiner Bros. Ltd, Jersey (cf. Exhibit 35-5-13 p _ 1). This corporation is controlled by Mogens Amdi Pedersen and is the account holder of the Tvind organization's main bank acc01Ults, ef. Exhibit 35-5-43 p. 32. In a letter of 3 July 1995 to Poul Jergensen, Pedersen's close employee Kirsten Fuglsbjerg wrote that shc would instruct the French associations' accountant Bernard Leutcnegger, Paris, not to mention the transfers to Kirchheiner in his audit of the French Associations financial statements, cf. Exhibit 11-2 p. 20e. 45 _ In 1992, La Societe Verte distributed a total amount of DKK 1,028,000 to Frelleseje (Common Ownership Fund), cf. Exhibit 56-3-1-12 p. 6. This Fund owns the Tvind organization's real propelties in Denmark, including the schools. 46. In 1993, La Societe Verte and L'Energie Etemelle distributed a total amount of approximately USD 176,000 to Eastover Properties Ltd_ and Furtherland Farming Ltd, Cayman Islands. Both corporations are controlled by Mogens Amdi Pedersen, cf. Exhibit 35·5-43 p. 8. Like a number of other itcms in this paragraph - the payments are mentioned in thc draft auditor's comments 9n the French associations. In a letter dated 6 May 1995 to Poul Jergensen (now chairman of the Foundation), Kirsten Fuglshjerg mentioned that the comments on "Cayman Island" would have to be removed from the comments on the accounts, cf. Exhibit 35-5-10. 47. In J 991 , a total amount of approximately FF 620,000 (approximately USD 60,000) was transferred by La Societe Vene to John F. Parson Ltd., Belize, as consultancy fees_ In addition, La Societe Vcrte distributed consultancy fees of approxima~cly FF 370,000 (approximately USD 35,000) to Jambalaya Ltd., Hong Kong 13 (Exhibit 35-5-10 p. 5). Both corporations are controlled by Mogens Amdi Pederscn, cf. Exhibit 35-5-43 p . 10. According to statements made by Steffen J0rgensen (Exhibit 54-17) and Pia Madyig (Exhibit 54-19), these corporations in fact did not provide any consultancy services for the projects. 48 . On 28 January 1992, La Societe Verte distributed a total amount of approximately usn 440,000 to purchase a condominium on Fisher Island, Miami. This condominium was owned by Jolm F. Parson Ltd., Belize, a cooperation controlled by Pedersen. Mogens Amdi Pcdersen and his partner, Kirsten Larsen, lived in this condominium on Fisher Island from 1992 until 2001 when they are belicved to have moved to Zimbabwe, after the Danish prcss exposed their presence in Florida, cf. Exhibit 35-5-43. Further, on 6 February 1992 approximately USD 25,000 was transferred to Pedersen and Kirsten Larsen's personal American Express account with Sun Bank, Miami, cf documcnts found during the search at Sten Byrner's residence, Exhibit G-2-2 and G-2-3. 49.ln the period belween October 1990 and June 1991 , a total amount ofFF 3,338,548 (approximately USD 300,000) was transferred by La Societe Vcrte to Distributors International Ltd., Cayman Islands, cf. bank vouchers obtained during a search in Paris, France (Exhibit 15-3-1 and Exhibit 40-5 pp. 5 - 8). Di~ lTibutors international is not shown in any of the organizational charts found during the searches made on 25 April 2001. However, the corporation forms part of the Tvind organization, and Marlene Gunst and Stcn Bymer from "LG' s fmance" were authorized to withdraw amounts from the corporation's accOlmt, cf. EXhibit 15-31-4 p. 8. 50. On 20 July 1992, a total amount of FF 350,000 (approximately USD 30,000) was transferred by La Societe Verte to the corporation CCTT SARL, France, which is a corporation controlled by Mogens Amdi Pedersen, cf. Exhib it 15-3-1. CCTT SARL is part of the Tvind organization's network of commercial corporations trading used clothes, cf. Exhibit 35-5-43 p. 39. 5 I . The persons who actually arranged these transfers from La Societe V crte and L' Energie Eternelle were Mogens Arndi Pedersen's closest employees in "LG's fmance" during the period under review: Sten Byrner, Marlene Gun~t and Ryth Sejer¥'!e-Olsen. cf. Exhibit 15-3-1-2 pp. 1 and 20 ff. 52. In sum, the French associations transferred over USD 1,700,000 to the entities mentioned in paragraphs 43 - 50 between 19.91 and 1993 . None of these paymentS were recorded in La Societe Verte's, L'Energie Etemelle's or the Fowldations financial statements, cLExhibil 11-2 and Exhibit 12. Instead, the payments were camouflaged through the preparation of fictitious applications co the Foundation and fi~titious reports on the application of the funds. For example, it appears from a document prepared by Mogcns Amdi 14 Pedersen's close employee SWJ Byrner on 22 December 1992 (Exhibit 56-3-1-12 pp. 9- 11) that in 199 11992 DKK 9,023,400 was pajd by the French associations for unauthorized purposes. To conceal th is fact from the authorities, the document states that fictitious accounts etc are to be prepared, showing that the Tahiti project has received USD 600,000 and the Malaysia project USD 700,000. 53 . This demonstrates that the accounts of the French associations used as documentation for the application of the Foundation's funds (Exhibit 11-2) were false. Bernard Leutenegccr, an accou.ntant in Paris, has stated to the French police !hat hc has been the associations ' accountant, !hat there are no special auditing standards for French associations, and !hal double accounts in fact were prepared in thcse associations precisely in accordance with the instructions he received from Kir.:;ten Fllglsbjerg (who is a close employee of Mogens . Amdi Pederscrt). VII. Criminal law: Application of the Law to the Facts Embezzlement (count 1) 54 . Count 1 charges Mogens Amdi Pedtrrsen with embezzling DKK 75 million from the Foundation. According to section 278{l) item (3) of the Danish Criminal Code: "Any person who, for the purpose of obtaining for himself or for others an unlawful gain, (. . .) unlawfully spends money that has been enmtsted to him" is guilty of embezzlement". The penalty for embezzlement of a particularly aggravated nature is imprisonment for any term not exceeding eight years, cf. section 286(2) of the Danish Criminal Code. According to section 88( 1) of the Danish Crimjnal Code, the penalty may be increased to imprisonment for any term not exceeding 12 years where there are particularly aggravating circumstances such as several oITcnces. 55 . To obtain a conviction for embezzlement the Government must prove that (i) the offcnder has willfully acted for purposes of ~ain, that (n) the offender had access to deal with and dispose of "tmst" funds , i.e. ftmds which were to be kept separate and apart from his own funds, and (iii) that the Foundation' s funds . have bcen consumed. 56. Under section 278 criminal liability is not conditional upon the offender having personally obtained a gain. Cases where the offender acted [or the purpose of obtaining an unlawful gain for "others" are also covcred. Nor is it a condition that the Foundation has suffered a lo.ss. Section 278 also includes cases where the Foundation is put at "significant risk" of loss, e.g. through unlawful lending of Foundation funds. Because Mogcns Amdi Pedcrsen transferred the Foundation's funds to his own personal use (e.g., for the 15 purchase of the eondominiwn iri Mianii, F1orida) and to'corporations and other entities controlled by him and his co-defendants, and because he failed to use these funds for public utility p1lI]Joses, using them instead for other (unauthorized) purposes, he illegally consumed "trust" funds in violation of section 278 of the Danish Criminal Code. Tax evasion in the Foundation (count 2) 57. Count 2 charges Pedersen with tax evasion for causing the Foundation to furnish the tax authorities with incorrect, incomplete or misleading infonnation, in order to justify the illegal deduction of DKK 85 million from the Foundation's tax returns_ According to section 289 of the Danish Criminal Code, cf. section 13 Qf the Danish Tax Control Aet: "Any person who with intent [0 evade payment of !aX to the public authorities gives wrongful or misleading informacion ( ...J to be used when deciding on assessment or computation of tax" is guilty of tax evasion. Tax evasion of a particularly aggravated nature is punishable with imprisonment for any term not exceeding four years. According to section 88(1) of the Danish Criminal Code, the penalty may be increased to imprisonment for any term not cxceeding six years if there are particularly aggravating circumstances such as several offences. 58. The elements of the crime in section 289 of the Danish Criminal Code show that the decisive point is whether the offender has given "wrongful information". Every year in the period from 1987 - 2000, thc Foundation has filed income tax returns showing that the Foundation ' s funds have been used exclusively for charitable or public utility purposes. On this basis the Foundation took such large deductions under section 4 of the Danish Foundation Taxation Act that the Foundation's taxable income was reduced to 0. TIle deductions are supported by fraudulent documentation in the form of applications to the Foundation and reports and accounts allegedly showing the application of the funds for public utility purposes. 59. As has been demonstrated above, however, the police investigation has shown that these applications, fictitious, false or willfully misleading because the funds have not been used for reports . and accounts are . public utility purposes. The investigation has also shown that, in reality, it was Mogens Amdi Pedersen and his executive staff who controlled the Foundation's allocation of grants and the preparation of its tax returns. This means that Pedersen has caused wrongful information to be given to the authorities about the Foundation's tax matters. Under Danish law the prosecuting authority need not prove that it was Pedersen personally who supplied the wrongful information to 'obtain a conviction for tax evasion, cf. above on "conspiracy" . 16 -. ' ~. Tax evasion in the contributors' personal income tax returns (count 3) 60. Count 3 charges Pedersen with eonunitting tax evasion by causing the members of the Teacher Group to violate Danish tax law by improperly deducting their donations made to the Foundation on their personal returns. TIlesc deductions were illegal because, a~ tax demonstrated above, the Foundation distributed its fund s to various commercial enterprises owned and operated by Pedersen or the Teacher Group - and in some cases distributed its money directly to Pedersen and his co-defendants. Accordingly, the Foundation was not entitled to tax exempt status under the Danish Tax Code and the Teacher Group members were not entitled to deduct these donations from their taxable income. 61. The evidence produced has shown that the Foundation was established by Mogens Amdi Pedersen for the purpose of wrongfully obtaining deductions for the contributors. As the Foundation has in fact not used the funds received for public utility purposes, payments to the Foundation were not deductible, cf. section 12 of the Danish Assessment Act. Consequently, in addition to giving rise to criminal liability in relation to the Foundation's tax matters, the false documentation also gives rise to criminal liability for tax evasion as far as the contributors are concerned. 62. The contributors are all members of the Teacher Group, and their privatc finances are managed by the management of the Tvind organizati.on. In practice the income tax returns were prepared by the Tvind organization's headquarters in Grindsted, Denmark. According to Danish case law (Supreme Court judgment. reproduced in the Danish weekly law reports '1Jgeskrift for Retsvresen 1989" p . 128), criminal liability under section 289 of the Danish Criminal Code also comprises any person who has "assisted directly" with the supply ofwmngful information. Limitation period 63. Under Danish law both tax evasion and embezzlcment are subject to a limitation period of ten years, cf section 93 of the Danish Criminal Code. The limitation period is calculated from the day when the punishable act ceased, cf. section 94 of the Danish Criminal Code. If there are several acts of an identical nalure which are done continuously as part of a single coherent scheme, a "continued crime" has been committed. In that case the limitation period is calculated from the day of the last criminal act. As the charges against Mogens Amdi Pedersen include acts committed during the period up to March 2001 , all the acts comprised by the charges of tax evasion and embezzlement fall within the time-limit often years. 17 64. Danish case law contains examples where several eases of tax evasion are not regarded as a "continued crime". As mentioned, it is a condition that the acts are done continuously. This .rl;quirement is not. satisfied if there is one ycar between each case of tax evasion, typically in connection with the annual filing of the income tax rerum. If, on the other hand, it is a planned oper,1tion where false income tax returns are produced consistently during 13 years together with false supporting documentation (application, reports and accounts), this crime is a continued crime. Because Pedersen's establishment of the Foundation was part of an claborate continuos scheme to evade income taxes, all the crimes alleged in counts 1,2 and 3 were part of a "continuing crime", and none of the Government's claims are barred by the statute oflimitations. VIll, Conclusion 65. T have personally examined the evidence mentioned in this declaration and in the Case Summary. I can attest that the evidence indicates that Mogens ~di Pedersen is properly charged in all three counts. T declare under penalty of perjury that all the information contained in this declaration and in the Case Summary concerning the acrual facts of the case and conceming the applicable Danish law are accurate and correct and given to the best of my knowledge and belief. 18 {f r Tne Ci7l ef Consta"ie In Hois re.; rn Thc Puhlu; I'roS~'Cllfor T(J r .)"L',.,O/l' ECt mom ,.- C r : mc , Case Summary as on 1 \ovember 2001 In SAOK 278,00 The Court m Rmgkobmg SS 1 22 1.'200 1 The Public Prosecutor \logens Amdi Pedersen et al. 1. Introduction The charges In thiS case concern embezzlement and tax fraud to amounts ot appro:>.: DKK 7~ m and DKK II I million. respectively. for a nwnber of transactions m '"The FmlfJdan on for :ilL' Supporr o( Humamtanan Purposes. the Promonon o f Research. and the Protccn un 0'- rne S arura/ En\'lronment ,. (heremafter called ·'the Foundation") . I " • A number of contnbutors have paid approx. DKK 70 m to the Foundation. which - being approved as a humarutanan organisation cf section 12(3) of the Danish Ta:>.: Assessment .--\C I ma~" receive contnbuuons With tax benefit for the contnbutors The objects clause of the Foundation corresponds exactly to the formulation of section 12(3) of the Tax Assessment Act TIus m~ that the Foundation may legally (m relation to the Tax Assessment Act and to the objects of the Foundation Itself) allocate funds only to purposes of pubhc uultty. which :ll the same tune are m the nature of ""humallltanan "" purposes. purposes of ""promotlon of research"". or ""protection of the natural en\'Ironment "" The foundation h-..s not paid tax of the amounts received. as these ha\e allegedl~ been allocated for purposes of pubhc uuhty For such allocations deductions are made In the tax accounts of the Foundation. cf. section 4 of the Danish Taxation of Foundatlons Act In th:: penod 1987-2000 a total of appro:>.: DKK 100 m has been prOVided and allocated. \\ hlch has given the Foundation tax deducuons to the same amount In September 2000 the Chief Constable m Holstebro decided to commence an Imestlgatlon of the activIties of the Foundation ThIs was done m cooperation between the Holstebro pohce and the Public Prosecutor for Senous Economic Cnme. Copenhagen In March 200 I the Chll! f Constable decided to charge four persons. !,-1oeens Amdi Pedersen. Poul Jergensen. Sodil Ross Serensen. and £"a Vestergaard. On the background of a number of deCISions by the Court m Rmgkobmg. a coordinated poil ce action "" :lS carned out on 25 Ap nl. 200 I agamst eight addresses In Denmark. \\hlle docum~nts EXHIBIT ·e Jam?s". 3 Thais? r \\ ere also obtamed from a number of thlrd parties and corporations. mciu:itn~ C:: ::'.1ni.\11amJ. CSA , At the police action 70 computers were seized. 16 of whIch \\ere equipped \\ Ith the ad\ an.:.:;:: encryption program "Safeguard Eas~" A large part of the documents In th~ .:omputas \\.:~.: encrypted With other programs 'one of the defendants or the users of these .:omf:'uters t c,.:.:~: one) were Wlllmg to state the password for the computers Dunn'! the summer and aurumn of 200 I the poltce technicians manag.:d to rr..:li-~ pa:1 or th: mate;a1 m the secured computers readable. and m October 200 I It became posslbk to mJ.i-.: :. systematic s~rch m the matenal. which IS \ er:- e:xtensl\ I! _. . ., Summan' The lIl\estigation III the penod between April 200 I and October 200 I has re\ >!aled that all contnbutors are members of the Inner clreie of the T\"Ind organisation. \\hlcn IS :l hierarchIcally butlt assoclatlo.n With clear political alms. headed abo\ e all b\ the defendant \10'lens AmciJ Pedersen. the defendant. and that the defendants control the pm ate econom~ or" the ~ontnbutors. whIch IS managed by the defendants or their assistants. that the Foundation IS not managed by an mdependent board of directors. but that ..1L' !actu defendants control the funds paid to the Foundation. th~ that - to the e:\.1ent described below - the FoundatIon has made no allocations to publtc utlht\ (humaIUtanan. etc .) purposes. but to c'ommercla1 enterpnses (enterpnses and instiTUtions). which are controlled by the defendants and where the profit of the enterpnse accrul!d to the defendants . In addition. allocations have been made to enterpnses or mdl\"lduals whom the defendants have deCided to favour. all In order to procure for themsel\es dlrecth or Indlrccth an unwarranted gam - or to procure unwarranted gains tor the chosen third parues. n that It has been anempted to conceal these unwarranted allounents from the foundation authonry III Denmark (The MIIlIStr:- of Justice. Department of Pmate La\\ l. the defendants hanng prepared or caused to be prepared Ulcorrect appltcatlons for support and mcorrect reports on the use of the funds of the Foundation. and the defendants have also made seerrungly IIldependent associations apply for support. where In fact these aSSOCiations \\ere controlled by the defendants and created for the purpose. that the defendants - until further to the e:\1ent descnbed belo\\ • have thereby comrruned an offence under section 278 of the Danish Crmunal Code b~ mlsappropnanng '1.inds >!armarked for pubhc utility (humarutanan) purposes, that the tax authontles - on the basiS of the defendants ' Incorrect. IncompJete or mlsleaciJng IIlfonnatlon - have each year approved the Foundation as' a reCIpient of ta:x-pm degl!d contnbuttons. and that the ta:, authontles have mistakenly approved the deductions made In the annual tax reTUrns under the prete:xt that allocations ha\'e been made to publtc utdlt~ purposes. whIch - still to the e:xtent that thls has been descnbed until further In the follo\\ln\z . IS purushable as tax fraud. cf section 13 of the Danish Ta-.. Control Act The circumstances of the case are the follomng f1 r .- I 3. The Tvind Teacher Group ("L:Erergruppen" .- LG) , 3.1 The activities of the Teacher Group Around 1970 a group of teachers who opposed the establishment In Denmar\.; fonned .l commuruty around a folk rugh school The leader of Uus group \\3.5 \10gens Arnd: P.:de~ser. From tlus beguulIng a \\orld\\lde orgal11sallon de\ eloped. colloqulall~ called ··T \ Ind · \ \\ Iln reference to the locality where the orgarusatlon was first established) Via the liberal Darush school legislation. wruch ensures public financial support to prl\ atc schools. the group founded a large number of schools 1Il the penod after 1971 .-\t the sam.: . time the group. wruch had come to compnse ·approx 3~00 persons with a common Ideological com1CUon. built up a network of lIlStitutions and enterpnses. which [od.l~ count schools in Denmark and abroad. factones. plantauons. farms and shops. rec~ chng orgarusatlons and other enterpnses In more than 55 countnes . According to the school association' s 0\\11 publication "Skoleerfannger" (School Expenence I from 1988. the asSOCiatIOn was based on the Idea that all teachers In T\lnd \\ere orgaI1lsed In a tight commuruty. colloqUially "12rergruppen" - LG (The Teacher Group) The Teacher Group is fonned on three basiC pnnclples Collective econom~ . collectl\ e time. and collective distribution. "Collective economy" means. an10ng other things. that the teachers transfer all their available lIlcome to Jomt savlIlgs. while for their 0\\11 requirements they receive food. lodglIlgS. and pocket mone~ from the conunurut~ ~C ollective time" mc:ans that the members of the LG are a·..ailable to the commuruty and that to a certain extent the~ forgo their personal rights. such as the nght to start a fanuly according to their 0\\11 Wish "Collective distribution" means that the commuruty deCides where the LG members are to work and what they are to work With. In practice tlus IS deCided by the "Dlstnbuuon Group' ·. Ul casu Mogens .A.mdi Pedersen and Kirsten Larsen or the persons appOinted b~ these [\\ 0 The police matenal demonstrates that LG 's actmtles Ul the penod 1992-2001 had expanded far beyond pure school activities . In 1992 the organisation had the follOWing productive act!'1t1es : I " LG's schools III Derunark. divided Into a number of sub-groups Continuation schools . FreI: Schools. etc. In 200 I a total between 45 and 50 schools . LG's schools abroad. espeCially Ul ScandinaVia and Africa. - .The University of the Seven Seas (L·SS). LG's plantations and properties abroad. LG's merchants. i.e. shops and wholesalers for the sale ofan1ong other thmgs rec~cled clothes in a number of countnes. LG's factones. Illcluding an10ng other thUlgS manufacture of shoes Ul Morocco. - the Federation UFF lHumana. In 1977 LG established the rehef agenc!: UlandshJa:lp fra Folk til Folk (UFF) (Development .~d an10ng the Peoples). which collects second-hand clothes III Denmark and - under a number of other nan1es - Ul a large number of European countnes . In the United States the clothes are collected under the name of "L"SAgaln " The Ultematlonal superstructure on L'FF IS "Humana. People to People". which IS managed from Derunark and from the ne\\ headquaners of the orgarusauon In ZImbabwe under the nan1e of "Federationen" l;'FFlHumana works In Afnca under the nan1e of DAPP. In other places ADPP . L0 ' s prOject ventures. plantations. fanns. sa\\mills and other enterpnses In a large numbc:r of countnes. espeCially 1Il ASIa. Central and South Amenca. LG's enterpnses. Illcludmg a number of foundations In Denmark and abroad r , These actl\1ues are still being exercIsed. cf E'Jubn 5 6 ~3- 1 -- pp ~5- ~ ~ . \\hl.::h 15 Jr. un':J:':': list of262 "LG Projects ". found on a secured computer from Odlns\eJ. Gnnastcd ( E\.Illo l! ' ,-' D-I-26-04. tab ~2 Ul the dossIer) 3.2. The income of the organisation In the uutlal penod (1970-1980) the Ulcome of the orgarusatlon consIsted prumn i\ oi gr:um from the Darush Government. Ulcludmg salanes to teachers of the Free Schools and abroad Toda,· the TVUld group IS finanCially Independent of grants from the Darush Go\emmen t. c~.: . wtuch Ul 1996-1999 stopped the public support to the T VUld schools Ul Derunark In 1992-1993 (and preswnably correspondmgl~' today) the Income to the teacht! r group CJ.m :: from a large number of sources. cf tab 33 In the dOSSIer. among otht!rs Ulterest on the capitaL _ wage Ulcome from emplo~ment In Derunark and abroad. Ulcome from contamer leasUlg. Income from stup leasUlg Ul Denmark and abroad. - Ulcome from the sale of clothes under Handelshuset. Ulcome from operatlon of factones Ul Morocco. Ulcome from fruit trade. Income from projects financed by Tnnd 's Humamtanan Foundatlon. Includmg IFAS and La Societe Verte. Ulcome from leasUlg of properties Ul Derunark and abroad. lflcome from sale of LG ' s propert~ . Income from enterpnses Ul L'SS. ie. LG 's plantations and farms . Income from production of and trade \\lth cont,aUlers Like the documents mentloned below. Uus document has been found at searchmg at Sten Byrner. who Ul the penod 1987 -1992 was centrall~ placed Ul the orgarusatlon It appears from the dOSSier. tabs 1. 2 and 3. . that Ul 1992 Mogens Amcil Pedersen deCIded to orgaruse "LG' 5 Treasury". i.e. the finanCial structure Ul the Tnnd Group. na a network of bank accounts . These bank accounts are ov.ned by comparues placed Ul tax havens. cf Irrunedlatel~ belov. . It appears from Amdi Pedersen' s plan for the "baslc structure of the total econom~ .. (the dOSSIer. tab 7), that the final control of the economy Ul T\1nd lIes \\1th "our o fnce . .... hlch deCides ltse/fas reianons /0 entrepreneurs. pnnclpal formanons . the diVISions or'th/! rora / ecol3omy. and to Marlene and Ruth " cf below about !hIS document By \l;a~ of conclUSIon It appears from the documents mentioned and from Amcil Pedersen's lener dated 22-June 1995 (placed under tab 42) that the objective of deslgmng LG ' s treasu~ IS to ensure that "the nmJ, are placed so that at an..... nme they are avaIlable ro us. that they are never aVGl iao le to ot;1I.:n that they ar~ protected/rom theft. raxaflon, and prying by unaurhonseti'persons, that rhl! JO lnl o.....nershlp I,f ensured " (tab 3). and to "Iay do ..... n a nnstea' access path .... ah only ourseives as compass holders ,. (tab 42) The documents JUst mentloned descnbe the organisation plan In T\'Ind as per 1'192 ThIs plan has SUlce been Ul1plemented TIus IS demonstratedb~ EXlublt 56-6-1~ (tab 43). whIch IS a comprehensIve survey of the construction of the' T vUld Group as per I September 1995 The Group cilagrams have been found in one of the secured computers. EVidence ExhibIt E-I ~-8- 1 The survey compnses more than one hundred companies' and foundatIons, where the holcilng compames are placed II1 tYPical tax ha"en countnes. and where the recumng persons 111 the /1 V5 T , ~ " central comparues seem to be Kirsten Larsen. Anne Hansen. Else Jensen. Birgitte Krohn. Svcnd Sercnsen. and Joep ~agcl. d the survey under tab 43. page I The polJcc estunate that toda~ the Tnnd Group controls assets (cash. properties. stups , etc I amountUlg to a total of several thousand m DfU\. In order Just to give an Idea of the mamutude of the assets controlled b\ the orlzarusatlon. It rna\ be mentlonea that In 1"'~~ th.: T\~d Group had a turn~\'er of mo;e than ;ne thousand m DfU\. Icf rrunutes of meeting on 20 Jul\' 1995. tab 9 Ul the dOSSier) The \'alue of propert: o"ned b~ T\'Uld In the l'S IS est~ted to about DKK 120'm. the \'a!ue of propert:· In Denmark In 199~ amounted to aDOU: DKK 265 m. whlle the value of plantations etc o\\ned by CSS amounted to L'S D 38 11 m. cf ExhIbit 56-3-1-7 page 50 (the dOSSier. tab 9) 3.3. The Tvind Management The T\'Uld orgarusatlon IS often described as beUlg e:\1emally a democratic. Informal orgarusatlon. where the teacher group makes all deCISions I1l harmony Ho\\ e\ er. It app~rs from docwnents found at the search on 25 Apnl 2001. that the TVlnd Group IS organIsed In stnctly tuerarducal structure \Vlth clear hnes of command. cf. espeCially the dOSSier. tab 7 .:l The top level: Mogcns Amdi Pedersen and Kirsten Larsen are the top management of the Tnnd Group . It IS unpossible - except from a few cases - to separate these two persons. who usually sign JolOtly With the signature "KLAP". Also. Amw Pedersen uses other deSignations for the group management such as "Our office" or "The Passmg of the 'Year" ' Second level : "LG's economy" is the management level Just below Amdi Pedersen and hlrsten Larsen. In the penod from 1992 to tius date Ruth Sejeree-Olsen and Marlene'Gunst are responsible for tius furictlon. assIsted b~ a nwnber of staff members. such as Anne Hansen Third level: The lOdividual malO formation holders. Ie the head of the schools I1l Denmark. the head of the Federation. the head 'Of LG' s commerCial actl\,ltIes. etc In the sur\'e~ under ub 7 the heads as per 1992 are mentioned by name I " Fourth level. The operation managers. Ie. the line managers In the organisation. Ie the I1lwVldual head of each school. the head of collection centres. a shop manager. a manager of a plantatiOn, etc, Fifth level : The lOdividual members of the teacher group It appears from a number of I1lternal documents. leners. etc .. of which a number are mentioned below. that KLAP (Amdi Pedersen and Kmten Larsen) have the overall management of all acn\.ities in TVUlci, asSiSted by "LG's Economy" - tlus applJes to all three malO areas for lOcome Ul TVUld: 1. School operation (Denmark. Scandma\'la. England. Africa. USA). 2. Collection and sale of clothes. 3 Operation of plantations. By way of conclUSion. the seized documents pr"" e that I1l realtty Mogens Amdi Pedersen IS the person Ul charge of the T "'lOd Group. and that I1l tlus capacity he IS asSisted b~ "LG ·s Economy". I.e, I1l the penod 1987-1992 b\ kIm Bonde Andersen and Sten Bvrner. and after that Ruth Sejeree-Olsen and Marlene G~nst. In addition. Kirsten Fuglsbj~rg (aka Chnsue PIPPS) IS centrally placed as seruor legal ad\'lsor to the T\'lnd management r , The persons mentioned . who must be considered to be the real leaders of T \ Ind. h.:1\ e tn::: feature in common that they have not been fonnally elected to the management of am company or foundatIon. but exert their tnfluence '1a the position of Kirsten Larsen and othc~ trusted LG members Ul the central comparues/trusts and - especially - \la an underlYing. tnfonnal power structure. whIch eXIsts LJ1 parallel "lth the fonnal group structure ane ,ne Farmers Trust. respectively . These trusts were orgarused as follows (cf EXlublt 50-o- I~ . p:l~C 2. tab 43) : In 1995 the core of the TVUld Group was two trusts on Jersey. The Hobbhousc Trust Bobbbouse Trust Protector Farmen Trust Protector Trustees Kmten Larsen. cll4lrperson.LeGal Trustees Anne Hansen (Jersey) Ltd Else Jensen leGal International Galex Norrunees Blrgme Krohn S\"end Sorensen Ltd. Jeep Nagel Fairbank Ltd. J(j.rsten Larsen Else Jensen Birgme Krohn . KIrsten Larsen. chairperson Falfbaru.. Lid Anne Hansen Cooper lmesl. Ltd Else Jensen Lyle Emerpnsc Ltd Birgme Krohn Svend Sorensen Jeep Nagel Cooper In\'estment Ltd. Anne Hansen Else Jensen Birgllte Krohn I Trustees L~· le Enterprise Ltd. Jeep Nagel Svend Sorensen Anne Hansen Ltd. Radmore Ltd. Cbatswood LId. Lars Jensen Arme Sieisen .1 \ r T'1nd's operauon companies. cf. the Group survey. tab Camberle~ ~3 It appears from Sten Byrne' s statement to Amdi Pedersen of 10 October 1992 (tab 3) that TVUld's operaung companies are controlled byHobbhouselFarmers Trust, because all shareholders have Signed deeds of conveyance concerrung their shares to the benefit of the two trusts . During the penod after 1995 the group structure has been changed. among other dungs, Ul that FaJrbank Cooper & Lyle have been merged Into one company 3.4. The Humanitarian Foundation In the opllUon of the police. the Humarutanan Foundation the "Fourth level" in the TVUld orgarusatlon IS one of a number of institutions at In the penod between 1987 and 1993 the defendant Bodil Ross Serensen functioned as chaJrperson of the Foundation . In the opllUon of the police. Poul Jereensen had durmg Uus penod of tune a decisive influence on the dispOSItIons in the FoundatIon, and Poul Jorgensen became formally chaJrman of the FoundatIon In ·1993 . Eva Vesterellrd has also had a number of managenaJ posts in the FoundatiOn. where she was deputy chairperson In the penod 1993-1999. In addition. Eva Vestergaard has In some periods managed the adnurustratlon of the Foundation LJ1 cooperation WIth LG's Economy's Amdi Pedersen and Kirsten Larsen. The management is exercIsed through the heads of LG' s Economy . bl r In the opllUon of the Pohce. the Foundation IS managed (and has alwa~ S been llUIlaQ>!d) ulr.:.:: by Moaens Amdi Pedersen and Kirsten Larsen. nre management IS executed thr;uQh "LG's Economy" (J the penod up to 1992 by Sten Byrner. among others. and from l'IN: b\ Ruth Sejeree-Olsen and Marlene Gunst), wtuch has direct authonty to Instruct the chaml~ of the Foundation and thereb~ the board of dlrectors of the Foundation In the opinion ot til.: police there are no more mtermedlate Imks m the cham of command bet\\ een ·· KL.-\P · an': t:-.: Foundation . The further document.ltlon of tills IS found In a large number of aocum;:nts . \\ h !.: :: ha ve been obtamed by searches _ at Sten B\-mer (documents of Importance to the time from about 19Y~ l. _ at Plagbo'rgvej 13 and Odms\ej m Gnndsted (documents up to October">:o\ embe; : U(ll') _ at Vejlevej 80 Ul Tarm (actual. up to \1arch. 200 I) P I The management of the Foundation cannot dispose of the properTy of the Founcbtlon \\ IthOU: obtalIllIlg the consent of KLAP and LG ' s Economy It appears. for example. from the dosslt:r under tab 17. that Anne Hansen from LG's Economy lIlStructs Eva V~stergaard on for Instance future applications to the Foundation In the same document there IS a list headed "The Foundation - fields of responslblil~" It appears from the Itst that all transactions m the F oundauon are to be sanctIoned b~ " LG' s Economy". wtuch IS also responsible (together \\ nh Poul Jeraensen) for all external relations The survey of all the fields of responslblil~ 10 the FoundatIon has been ",nnen by Ruth (SeJeroe-Olsen) and Marlene (Gunst). cf the DOSSier tab 22 . under tabs 25, 26. and 30. other examples have been enclosed to show that \10gens Amdl Pedersen through Ruth Sejeroe-Olsen and Marlene Gunst (and through klrsten Fuglsbjerg) controls the admuustratlon of the Foundation. and a further number of pieces of eVidence of tlus are mentioned below 10 sectIons -+ and 5 3.5. Allocations from tbe Foundation In the penod 1987-1999 the Foundation has made allocations oitotal1~ about D~ i u m to the followmg purposes. cf the Foundation ' S O\\n sur.·e~ . Exhibit 71-1. page 29 (Indications of amounts 71-2, page 192) ReCIpIent PrOject name - penod Sum paid Exlublls the case 10 r, Global Research 1987-88 , - Intemauonal Oistnbutors 1987-89 3 Grand Garderobe 1987-89 Mutual Mandann 1987-89 ;; TropIcal Farnung Research 198'7-89 6. SClenufic Farnung m the Canbbean I '}8" -91 , VOIce of tlle Thud World 1988-92 8. Biogas from Food Processing Waste 1989-90 9 Blous plant in French Polmesla 1990 -98 10 TropIcal Forest. MalaYSIa 1990-9~ 11 Flof\'l 1992-200 1 11 Power Stauon at Flof\'1 I:: Estate - Wmd Turbine 1993-9~ 13 .Envlronment Award of the Year ~ .. l~ The Research Project of I 15 Solar Ener~' ~tarch 1995 ProJect. Zllnbab\\e 1,}'J0 'bl- IFAS IFAS IFAS IFAS . IF AS IFAS IFAS IFAS La Soclele \ 'ene La SocIete Vene LS\·/l. ' Enerl!le Etern OSI Estate Th.e Tnnd School ASSOCiation The Tnnd School Assoclauon DAPP Zllnbab\\e 2.300.000 350.000 530.000 56-~-15 56-~-1 :: 56-~-1~ 93~ . 000 56-3-1~ l.5~0 . OOO 56-~-1 '7 I. r~5 . uuu 13 .960.000 . 3.00.000 5.80U.UOO ~.::OO OOU 13 .38U.000 5()-~-lu 56-3-:: 56· ~ .. 3 56- ~-I 56- ~ -~ ~ . 600 . 00U 56-~4 1.210.000 300.000 56-~- - 0 56-~-6 .'!SU .VIIlI 50 - .; -'1 r , I 16 1':' 18 19 20 21 " Solar Ener2\' ProJect. Zambia 1':190-200 1 Solar Ener~. 200 Villa2e Schools 199AIDS Research and HOPE Projects 1996-2UUO Foundauon Pame ' S Creek 1996-20()() Solar Energy plant. educauonal "orkshops Rehef GB and Anlzola 1999-200U Rehef to K05O\'0 1999-200U HOPE Projects Southern Afnca 1999- 2000 :;~ Supplementary grant. HOPE Centre 25 . Rehef to Mozambique 2000 26 HypotheSIS on Wmd Power ,- HIV/AIDS pliot project 2000 ,~ DAPP Zambia The Federation The Federation FPC , ~ t •• : .. I j HI I' The Federallon The SecessaT\ Semc The Federation The Federation The Federallon DS! Estate The Federation ~ I"> . ~ . x :: : :f} .tHH' ~ \1 1 '1111' - -4 1 II I 11(l(l I ~ 6 11 . 0\l(l :! Utl .tHlll 1.60tl .tH I( i '70.610.000 10 a numb~r of o th~ r Actualh paid Grant PrOJect name - penod I1.U50 .00U 2.300.000 I Global Research 198';-88 , !nternauonaJ Dlstnbutors 1987-89 350.000 ~ 5 0.000 , Grand Garderobe 1987-89 53U.UOU 53 U.00U 935.000 93 5.000 ~ \1urual f;.1andann 1987-89 L5 ~ O . OOO 1. 5~0 . OOO 5 Tropical FamllnlZ Research 1987-89 l.l : 5.000 1.1 75.000 6 SCientific FamunlZ In the Caribbean 1987-91 ' 13.960.000 13.960.000 - VOice of ule Third World 1988-92 300.000 300.000 8 BlolZas from Food Processmg Waste 1989-90 5.950.000 5.800.000 9 8102as Plant In French POIYneSla ' 15 .000.000 -'.200.000 10 Tropical Forest. MalaYSia 1990-9-' 16 . 2 ';'~ . 0 0u 13 .38U.000 11. Flol"yI1992-2001 ~ . 600 . 000 ~.600 .00 0 I II Power Stauon at FloT\'1 1. 210.000 1.2 10.000 12.Estate Wind Turbine 199 3 -9~ 300 ,000 300.000 13 En\'lronrnent Award of the Year 8.000.000 U 1~ .The Research Project of I March 1995 380.000 ~ 8 0 . 000 15 . Solar Ener~' Project. Zimbabwe 1996 16 Solar Ener~' Project. Zambia 1996-2000 1.1 50.00U 1.250.UUu 1- Solar Ener~·. 200 Villa~e Schools 1997 1.500.00U 1.50U.000 18 AIDS Research and HOPE projects 1996-2000 ~ . OOO .O OO ~ .000.001i () 19 Foundauon PaYne 's Creek 1996-2000 6.960.uOO 20 Solar Ener~' Plant. educational workshops 2.000.000 U : .23 U.oou . ::.::30.000 21 Rel.ef GB and Ansola 1999-20UU .,., Rehef to K05O\'0 1999-200U ~ IU .{){)(/ 3llJ.uuII -Aoo.oon - . ~ OO . OOO "_ oJ HOPE.proJects Southern Afnca 1999-2000 2 ~ Supplementary grant. HOPE Centre 1.3 60.000 U 60.000 I. 60u.OUII 1-.600.000 25 . Relief to Mozambique 2000 :! 6 HypotheSIS on Wind power 200.000 HIV/AlDS pilot project 2000 - Pro\·isions. tOlall~' :\llocatioDS. totall~ Allocated. but not granted 5,,-: . ! . II In addltlon. the Foundation has made pro\'lsions for later allocations .:ases A number of these allocations ha \ e later been charged back rr filII . UUI. ~ .OOnll( :-\lIocations. totalh' t : . ~5 1 ) 1. ~ lIt' E"hlbns of the .:ase ~ 6 -~- 1 :, :, 6 - ~-1 :: 56-~ - 1~ . ~6- ~ - 1 ~ '56- ~ -I56- ~ -1 6 5 6 - ~ -2 56-3-3 56- ~ - 1 5 6 - ~ -4 5 6 - ~ -4 56-3-5 6 - 3~ 56- ~ - 9 56-:; -1 1 56 - ~ - 1U 56- ~ - !S 110.16~.000 70.610.000 70.610.000 3 9 . 55~ . 00u The U1vcstJgatJon has sho\\TI that In projects m\'esugated by the police. allocations [0 public Interest purposes have In no case been made . but that the defendants ha\ e artempted [0 conc~a j r t.hJs in the followmg are mentioned onh - for reasons of space - a number of J. 1 1 0\:J ::,1 n~ -:- : J total of DKK 45 m wlUun the three mam purposes. \\ hIch allegedi~ h;l\ e recel\ ed 5UP P0 r: Section 4 Allocations to "research purposes " - IFAS Section:' Allocations to "narure protection " - La Societe Verte:md I" Energl1! Etemelle Section 6. Allocations to ··humarutan __ .·· purposes - The Federation. LFF HununJ The counts mentioned are sull bemg m\esugated. and the descnptlon IS thus J. plcrur:: .:-i :n:: knowledge acquired by the poltce about the projects as per September-Oetobe : "\': 4: Payments to Hpromotion of research" Allocations to IFAS 1987-1992 ~ . 1. ~ I I I I Survey of allocations to IFAS As far as the followmg allocations are concerned. there are appltcatlons from IFAS (Instlrut;:' for SCientific Research and Applted SCiences l. and the purpose of the appltc:lt1on IS In JII cases stated to be "research purposes " Exhtblt groups 56-3-12. 56-3-13 . 56-3-1-' . 56-3-15. 56-3-16. and 56-3-1 7 SI' researc h projects carned out by IF AS 1987-1990 Exhibit group 56-3-2 : VOIce of the TImd World. a research project earned out by IFA.S 198 81992. Including Exhibit group 56-3-5 \1amtenance of the ship " Rerum of \brco Polo" In the period 1987-1992 pa~ment.s have been made of totally about DKK 20 m to IFAS from the Foundation. in all cases IF AS has produced documentation to show that the mon e ~ from the Foundation has m fact been spent on "promotion of research" 4.2. Applicant: IF AS I I h The IF AS Foundation - instlrute for SCientific Research and Applted SCiences - was founded In 1987 by Lone Bjerre. Josefin Jensson. Sten Hejstrem and Lars Fribert. cf e~JlIblt 56-06 P 6 Among other dungs. It appears from the starutes of the foundation (tab 35) that the purpose of IF AS IS . " The,prlvaTe Insnrunon bases ItS research on the art or c01"7iJ lmng pre\'IOtI S dHcm'crll!s Invennons and kno~n bllf not co-ordmatea mechanlJms In a pracTIce .... hl ch 0 /1 'U on c~' exploITs all eXlsnng research resu lts . •md through aCTIon and precedent research If1 tht: rj ,'iJ as well as fI1 the laborarory creates ne .... pehpecTl ves and through research d fort s aiso or d combinatory nature creates ne .... produ cts. marena/s. proct!dures and approaches to pr(J~rL .U ( or various branches ofrrade The prlvat(· IflSflTIITIOn carries OIlT baSIC research In a caro/ll speCIal sense. The Insnrunon 0plcally engages In srudles concermng the Idenfl ficar;on vr fn l ' real dIStance be"""een The general level or the sCIences and ITS advamages to the g eneral populanon. especIally In the Th Ird World It also appears from the starutes that IFAS Intends to cooperate both WIth commeTCIal and non profit panners The ongmaJ board of duectors of IFAS ( I~ September 1987 to 18 October 19'1.3 I conSISted 0:Birzine Hector Nielsen (chauperson I • Anne. Sophie Pedersen (deputy chairperson l. Birzine Krohn. Birl:it Ring and Rikke \"iholm. R..!kke Vtholrn IS also founder of the Found3tion. On 18 October. 1993 Blrgme ~ohn \\as replaced b~ Christian Jacobs~n . .-\ li members of the board were members of the teacher group Ul Tnnd Else Jensen. \\ho IS aiso :l member of LG. was allegedly employed as "research manager" Ul IFAS IF.-\S was hquldated as per 31 December 199~ Poul Jergens~n was ItqUldator The m\,esugatlOn has shoWTl that "IF AS" IS a front orgarusatlon establtshed and tn realtf' mana~ed b\ the defendant Amdi Pedersen that does not carry out any research proJects . :m':: wluch-Is established solely for the purpose of regulansUlg payments to "research purposes At no POUlt In tune has there been any actiVIty m IFAS which may be charactensed as research. and IFAS has had only pro forma employees All Ulcome to It:"AS stems from th:! Foundation. and all expenses are wages. tra\ els and other expenses to me "research prole.:ts · mentioned belo\\ All "employees " m IF AS have been members of the teacher group tn T \ lOci or students at the T\'md schools (who do not receive any pay). and the \\orkmg expenses go partly to the slup "Return of Marco Polo" . wluch IS o\\ned by the T\'lOd Group \Ia the ship o\\ners B&B Stuppmg. Cayman Islands The accounts for IFAS are part of Exhlbn ~6-b of t h ~ case ~o persons on the board of IF AS nor any employees m IF AS or m the comparues that ha \'e received money via IFAS are ··researchers··. nor have they any qualifications for ca~1Ilg out research. This appears only unplicltly from information gl\'en under threat of "day fines " by Paul Jorgensen to the Department of Pnvate La". Exhlblt 71-1 P 3~ (the dOSSier. tab 36) Anne Sophie Pederse.n (deputy dwrperson m IF AS) has also explamed to the police thaI Amdi Pedersen deCided everytiung related to IFAS'S circumstances. and that she was 10 eVidence only by name on the board. which Signed only what It was asked to (Exhibit 5~-, . the dOSSier tab 41) If at board meetmgs she has asked where the research projects presented to her should obtam their fundmg. the answer has always been . "From the Foundation '" , I r Hans la Cour has Informed the pohce that Amdi Pedersen mvented the whole Idea of IFAS. mcludmg name. logo. objects clause. and Its cormecuon \\'Ith the Foundation (ExlubltS 5~-5 p ::2. the dossier tab 39). 0yvind Wistrem has sunilarly explamed that Amdl Pedersen. KJrsten Larsen and Sten Byrner formulated the statutes for IFAS and \\ert: behind the creation of thiS associatIon/foundation. cf Exlublt 54-4. p 10. the dOSSier tab 38 It appears from the same statement that the deCISion of dissolvlOg IF AS 10 1993 was not made b\ . ~ e board of IF AS . but at a meetUlg In TVlnd 's management In Gnndsted It IS noted that the defendants have anempted to keep back mformauon a~o~t IF AS from the authontles. It' also appears from the deCISion of the Department of Pnvate Law of 26 June. 2001 (Exhibit 71-1 p. 3 ff. tab 36) that aI1)ong other tiungs the Department has requested that the Foundation should hand over a number of documents about IF AS. among others the application from the project "Voice of the TIurd World". cf. belo\\·. On 6 November, 1997. Poul Jer&ensen stated that documents concernmg thiS project had been burned (Exhlblt 71-1 P 6). and 28 Juh' 1998 that the Foundation could not explain IFAS's circumstances (Exlubn 71 -1 p 7) On 15 !'.iovember 1998, Paul Jorgensen stated that "he has no Immediate access tu IFAS 's voucher marenal for rhe years J 988- J992 ' At the search on 25 Apnl 200 I th: police found the documents \\hlch allegedl\ nac t"1!.:n burned and the exhIbIt matenal concerrung IFAS In a safe at Poul Jorgensen (cf E -.JlID Il - i _. P 12) Subsequently Poul Jorgensen has also declared to the Department of Pm ate La\\ til:!: he kne\\ the persons well who stood betund among others IFAS and the prolects . and that th !~ IS also the background of the Foundation ' s grant of an amount to IFAS on the same da\ or th..: da~ foJlowmg receIpt of the application for support ~.3. The actual application of funds paid to If AS: ~.3.1. Initial "research projects·, Global Research, etc. ~.3.1.1. Applications and grants : 4.3.1.2 The police investigations of the projects: TIllS section IS bemg prepared The IFAS proJects 10 thIS penod Include the follo\\ 109 B.l.l (exhibit group 56-3-15): Global Research B.1.2 (exhibit group 56-3-12: international Dlstnbutors B.1.3 (exhibit group 56-3-13): Grand Garderobe B.1.4 (exhibit group 56-3-14): Mutual Mandann . B.1.5 (exhibit group 56-3-17) Troplcai Farmmg Research B.1.6 (exhibit group 56-3-16) Scientific Famung in the Canbbean 4.3.2 Voice of the Third World (Count B.1. 7, exhibit group 56-3-2 4.3.2.1. Application and Grant: On 25 August 1988 "All Europe Satellite TeleviSion Ltd" London. applied IFAS for suppon for a research proJect. which auned to show that "sateillte TV may be a culture carryIng tool that bnngs people 10 north and south closer together"' The application (Exhibit 56-3-:-:. p i) had allegedly been prepared by 0ivind Wistrem, who IOdlcated an address 10 Luxembourg The title of the project was "Voice of the Third World". and It states. among other things. that "the project has at the same nme a commercial aim and a public unln!" alJTI. wherfe thl! II II in!" aim t$ the/undamenral aspect ,. The application asked for DKK 9.060.000. whIch IS to be spent on two purposes (1) estabhshmg a TV statton. including wages. and (2) estabhsh;ng ··the satlmg.studlo Return of Marco Polo". includmg wages On 31 August 1988 IFAS then apphed the Foundation for a grant of OK}( 12.828,000, IFAS havmg allegedly deCided to enter IOto collaboration \\1th All Europe Satellite Tele\'lslOn Ltd on the proJect. The appitcatlon (Exhibit 56-3-2-2 p . 10) IOrucates that the funds are to be appited on "a research prOject In connecllon "K /lit establrshmg and Implemennng a research prOject m cunnecnon with a ne'K' teleVISIon stanon" The application IS Signed by Ann~ Sophie Pedersen. depury chairperson 10 IF AS . - ' On 31 August 1988 Thomas \·aeth. 'who allegedl~ \\as board consult.lnt for IF:~S . ;:\Dlltnt:': about a \1S1t to the apphcant Thomas \'aeth had gone througn the pro.lect \\1th Henrik Serensen. who "functlons as leader of the present 1\' studio" . c:" E~lbll 5b-~-:-: p i: On I September 1988 the Foundation deCIded to grant the application to IFAS . cf blllbll l~­ I P 22 . The board "expressed saTlsfactlon 14 uh rite \"uoi/0 · .0014 cr ana SCOpl! u : inC pr(J ;<' ,: ' The deCISIon was made by Sodi.1 Ross Serensen. Anne H:msen. Helle Aaboe. Hann.: Vesterborg. and Else Kragholm !'i lelsen In the penod to follow, All Europe Satelhte TelenslOn Ltd established a T\" channe l calk': "One World Channel" llus 1\' channel was given transrrusslon arne b~ satellite \ la an ;uzreernent WIth a French TV station. and from there m the penod between 1981f and I yQ I l n~mber ofTY programmes was transmmed approx I-~ hours every morning .-\11 C:'\3.I11pl.: of the programme parade from One World Channel IS mcluded m Exhibit 50-3-:-0 p 10 f .-\11 Important feature m the programmes offered was about 150 1\' programmes titled "Retum 0r" \1arco Polo" Other\\lse the range of programmes consisted of prograrrtnles on CFF ·Human,) and on condJUons m the ThIrd World. mcludmg programmes produced b~ TV stations m Afnea. Chma. and other places . The TV programmes "Return of Marco Polo" were produced by a 1\' tearn onboard the slup of that name . The slup sailed from South Amenea mto '''e PaCIfic and produced TV prograrrtnles about the life and the people m the countnes and on the Islands where the shIp called . The production manager on board was Hans 1a Cour Andersen. The captam was Henrik Wibrand. According to information from the Foundation Itself. the grant to IFAS has been paId WIth DKK 13.963,000, which has been spent on lease of the ship (DKK 2,600,000)' oper:ltIon of the slup and equIpment (DKK 5.277.000). equipment and matenals' (DKK 848,000), adnurustratlon and communication (DKK 1.040.000), and wages (DKK 4.197,000), cf Exhibit 71-1 p. 194 . 4.3,2.2. The police investigation of the project: ~ I The investlgation has sho\\n that no form of "research" was carned out In connection WIth establishment and operation of "One World Channel", and that likeWise m connection \\1th the operation of the slup "Return of Marco Polo" or the productions of the TV programmes of the: same ~e there was no form of research earned out. On the contrary. rhe funds for the project l+'er~ spent on producnon and transmrsslOn 0/ opInion .forming 71 ' programm~s This is not "research ". and the support has been given dIrectl~ or indIrectly to All Europe Sat -Ilite TeleVISIon Ltd.lOne World Channel AS, wruch operated a commercial. partly advertisement financed TV stau~>n . Therefore It IS not a case of support for a public utlilry purpose The ownership relations to the parties involved: All Europe Satelhte TeleVISion Ltd (AEST) IS :l .::ompan~ regIstered In England The company was o\\.ned by Jonas Israel and Hans Jorgen Laustsen . AEST IS found In the Group dIagramme under tab 43 as an LG compan~ , which IS to be closed as per September 1995 (p 31 ) One World Channel AS was a 'ol"\\'eglan Iirruted Iiabih~' compan~ In thiS compan~ 0yvJnd Wlstrom was manager (EXll1blt group 56-3-2-12) The slup "Return of \tarco Polo" \\as o\\ned by B&B Shipping Ltd .. a comp:ln\ r;:C lst;:r.:..: on the Ca~man Islands Sten B\mer and Henning BJomlund \\er~ behtnd thiS CO~;JJ.ri\ B(\. B Slupplng IS sho\\n In the Group diagram as an LG compan~ . \\nlch IS to De dosed' In I I.N~ ; ; that the o\merslup of the ship Return of \tarco Polo IS to b;: transferred to .-\ r~11 Smith &. Co. Ltd. A Tnnd compan~ on Jerse~ . o\\ned b~ Falrba.nk. Cooper and L\kl. ct th.: Group diagram. tab 43 p 17 In the same way as In the pre\10US proJects. IFAS has employed the comp:ln~ ot" John F. Parson Inc. as consultants . This company IS registered In the l :S and was controlled b\ Sten B\Tner and Henrung BJomlund As Indlcated above. John F Parson Inc was o\\T1ed 1(1l.lu" b\ th'e Canbbean Famung Ltd (a Tnnd compan~ on the Ca~man Islands). \\olc h In t urr. . J.~ o\\ned !OO~o by Fairbank. Cooper and Lyle Ltd . J. r Tvind's TV station 0yvind Wistrem has explamed to the police. among other things. that he \\3.S J. membe~ ur" LG from about 1978-199: . The deCISion to establish Tnnd 's o\\n n ' statIOn \\3.S made D\ LG In 1986-87 (Exlublt 5"~ p 10) Kirsten Larsen gave lum the wk to establish thiS n ' station. and as lIUtlal capital he was paid up to DKK 500.000 In cash Otherwise Wlstrom senled the accounts WIth Birgme Lerbech Larsen (who In penods acted as cashier of the Foundation) The station was llltended to transnut TV progranunes dealing \\Ith T'lnd and the condltlons of the llurd World. It was Intended to operate a commercial T\' st3.t1on (p 16 ) Together With Poul Jer~ensen. Kirsten Larsen and Sten Byrner It \\as deCided to establish a company In England. \1a a purchase and a change of name of an exlStmg compan~ (AEST Ltd .) In addition a ~orweglan hnuted liability company With the name One World Channel AS was established. because Wlstrom did not \\ant to ha\e pennanent reSidence In England The turnover was placed In AEST Ltd .. whose accounts were worked out b~ the T nnd adrrurustratlon In Grmdsted. Sten Byrner had tl;1e contact With the English solicitors. \\ ho \\ I!r~ cooperating In the purchase and adnurustratlon of the company Wlstrom has not prepared budgets. research hypotheSIs or the application Itself to IFAS. although the application be3.rs Ius signature. Nor has the Wlmess prepared reports to IF AS about the project W lStrom does not know Else Jensen. the research manager In IF AS. as a researcher. but as a member of LG (p . 1.6) In connection ""th Wistrorns statement It should be noted that In the oplDlon of the police. the English company of AEST IS a brass plate company Without any proper operation. and Inserted In order to camouflage the cash flo\\ between the Foundation and the n ' station The activities Dn the ship Return of Marco Polo : Regarding the production of TV progranunes on board the ship It has been .established that :111 crew 'members were members of the teacher group 10 T"lnd. cf for example Exhibit 56-3-2- 7 p. 23 (lener from Hans la Cour to Else Jensen. who was the alleged "research manager" In IFAS) None of the crew members had any qualifications for makmg "research" or for producmg TV. cf Exhibits 56-3-2-7. P 23-29. and cf Hans 1a Cour's statement to the poli ce. Exhlblt 54-5. p 52 (tab 39) The Cml Law Directorate has anempted to throw light on tlus situation 10 connectIon With the Dlrectorate's supervisIOn of the Foundation. cf Exhibit 56-3-2-9. p 15 On I.. 'o\·ember 1998. for example. the Directorate requested the \1lIUstry of Culture to evaluate the "researc h related nature" of the project It appears from the reply from the Mimstry ofCulrure ( E~ l blt 56-3-2-9. p 19) that In order to make thiS e\aJuatlon. the follo\\'lOg IS miss mg. among other tiungs a nonnal SCientific project descnptlon. lists of collaborators With SCIentific qualificauons and their CVs. documentatton of ho\\ the resl!lrch rest,; lts hl\ ~ b~~n pt,;bilsh.:d Ir. .lci..n.:-\\ 1":0';':'= publications The Foundation (represented b~ Poul Jergensen I refusd to supph Ihl5 Int0m1.:lllun . .:r 9. P 2 L the dOSSier tab 36 '''- -. Hans la Cour has further explamed. among other thmgs. that the proJl!c:. Inc ludmg the roles of IFAS and the Foundation. \\:15 deCIded upon b\ Amdi Pedersen (E ~Iblt ~~-~ . p ~ ~) Th.: purpose of the n' station was to promo.te T\lnd and LG At l meeting m Gnndsted on ~ '\o\'ember 1988 the first transmisSions from the ship \\ 'ere sho\\n to the Inner cIrcle ofT\lnd. nameh' Amdi Pedersen. Kirsten Larsen. Else Jensen. Thomas \ ·aeth. Ruth SejereeOlsen~ and Bodi! Ross Serensen (p 53) At thiS meettng Arndl Pedersen and Bodt! Ross l lsL' discussed the purpose of the TV station The purpose of the \ oyages \\lth the shIp \\.:lS .:lls0 that of seardung for plantattons that could be bought b~ T \ md (j) 5~) :\ 0 medl.:l research \\ lS carned out on board the ship. and the research related acttnttes were lumted to Else Jensen ' s mstructlon to the cre\\ to prepare reports to demonstrate that "action rese.:m::h ·· \\as c.:lrrtl!d 0U : (P 55) , u,~ I It also appears from ExlubH 56-3-2-7. P 55. that the purpose of the ship was 19 let LG members participate m expedlUons m the PaCIfic. 19 produce TY programmes meant to be sold to Tnnd's o\\n TV statton and to commerCial stations. and !£..use the ship for tounst cruIses Hans la Cour expected that m 1991 the shIp ' S econom~ could be self-support mg. I e that "/FAS .... III/ade from the pIcTUre " It appears from Exiublt 56-3-2-7. p 61. that Hans la Cour has reported about the ship' s economy to Sten Byrner. The actual application of the funds for the project The prellmlllary mvesttgatton of the actual application of the funds that ha \ I! been granted to the project shows. among other thmgs. that the sum of OKK ~ . 3 m paid as wages has not been paid eff"ectl\ely to the "researchers" who were "employed" In the IFAS framework 0~'\md Wlstrom has not receIved wages. either A major Item - approx OKK 2.6 m - IS the leasmg of the ship This amount has been paid to the Caymen Islands company of B&B Shipping (Bymer and Bjorklund). whIch accordmg to l lease contract "1th IF AS charged a monthly lease of OK 50. 000 for IF AS' s use of the ship "Return of Marco Polo" (formerly "Store Claus ". cf the equivalent arrangement m count B I I) . Finallv there are pa\ments of about OKK 800.000 to John F. Parsons Inc. concemmQ walll!S and c~nsultant fees' These pa~ments are b~ed on a contract between the company (St~n By~er and "Henry Henrung" - alias Henrung Bjorklund) and IFAS The s..emces performed by the company to Justtfy the remuneration ha\'e not been established. About John F Parsons Inc . It is noted that the o~llershJp relations to the company ha\'e been deSCribed above. and that tlus company appears m other relationshIps as buyer of T \"Ind ' S properties m the L·S. among others a property on Ke~ West. FlOrida Conclusion On thIS background the Prosecutor finds that there IS probable C':lUse to suspect that there \\ lS no form of research earned out m the project "VOIce of the TIurd World '" . and that It IS consequently unlawful that allocations have been made and that deductions ha\e been made for these allocations and for pro\,lslons to the prOject /11 5. Allocations to ~~support of the natural en\·ironment" Allocations to La Societe Vene, ParislL 'Energie Eternelle, Paris 1992-1998 5.1. Survey of allocations to LSV/LEE In the follo\\lng ca..ses there are appllc:ltIons from a French J.SSOCl:mon. L.l SOCI;!l:? \:!~;: (!.:l' ':~ L . Energle Etemelle) . EXIlIblt group 56-3-1 Count 8.1.10: Grant of DKK 15 m (DKK ~ .I Q; . 5:'~ P.l IC out) nature protection m MalaysIa. project penod 1990-199~ t-:' Exrublt group 56-3-3 . Count 8.1.9: Grant ofDKK 348.548 and DKK 5 .9 ~8 .7Q 5 (a ll p.lld our I to nature protection on Talutl. project. penod 1989-1998 Exrublt group 56-3-4 Count 8.1..11: Grant ofDKK 17.212.73 5 (DKK 1~ . ::37 . :7 0 p.lld out) and DKK 3 . 64~.655 (all paid out) to nature protection m BrazIl. proJect penod 190~-:O O I r I j In the group of allocations to ··support of the natural en\"lrorunen( ' there IS also ExhIbit group 56-3-7 Count 8.1.12: Grant ofDKA 1.2 m (ali paId out) to T\"mdkraft. and Exrublt group 563-8 Count B.1.19: Purchase of the nature reserve Pa~lle · s Creek. Belize (DK" 6 Q m. the funds have been pald back) . These grants have not been made \ la LS\·. LEE and tor r:!asons or" space they are not further mentioned in the followmg 5.2. The applicant: La Societe Verte (LSV) and L 'Eneriie Eternelle (LEE): The association La SocIete Verte 'was founded by Sten Byrner. who was chaIrman of the association until rrud-1992 . The association was registered With the authontJes In France on 19 So\"ember. 1991 (Exhibit 10-2) In .1992 the executive corrmunee consIsted of Lars Jensen. Bodil Sejeroe-Olsen and Anne Hansen. The object of the assocIation (Exhibit 10-2 P 2) IS . among other thmgs, ··to assist In the protectlon and respltct of the environment .. The assocIation appears as an mdependent. ldeahstlc a..ssoClation. whIch has recen ed grants from the FounclatJon to three ··nature protection proJects·· In 1993 Tvmd founded one more French assoCIation. L . Energle Etemelle. whIch then took over the actlmies . The chamnan of the management m LEE was Lar~ Jensen. The investigation has shO\\ll that La SocIete Verte and L ·Energie Etemelle-are front organIsations, founded by the defendants. mthout any mdependent management. no office premIses (e~cept for a PO box address) . no.emplo~ees. no mdependent actl\ltles . and no real taSks . These assocIations have been mserted as mtennc:dlate links (outSide the control of the Damsh tax authontles) m order to Justify that m the' belo\\ mentioned ca..ses funds have been paId to the ·· protectlon of the natural envlrorunent"· In reah~ the French assoCIations are controlled by the defendants. and both assocIations appear In the group dIagram as LG compames (tag ~3. p 29) The members of the executIve corrunInee In the penod 1990-1998 are all prorrunent members of LG It also appears from several documents found at the search that both Lars Jensen (the chaIrman of LSV after Sten Bymer and chaIrman of LEE)) and the defendant Poul Jergensen T Ul cases related to the association recel\e UlStruCtiOns from the other defencllnts :md tro m other persons outside the association An example IS found Ul eVIdence exillblt G-:-: . th;: dOSSIer tab 5. where Anne Hansen asks Sten Bymer to prepare an additional application ior the Blogas Project (8 I 9), because too much money had been spent Ul Denmark on thi S proJect. Thus. LSV dId not keep the books for thIS proJect. for example Arndt Pedersen ane! KIrsten Larsen decided the procedure for dtssohlng the French associations 10 1998 and In ::l number of cases dtsposed of the funds paid Ulto the associations from the FoundatJ or. . .:: 1' tn.: dOSSier. tab 3~ In order to camouflage the connection bemeen the T\lnd management and LS\ ' 1.EE. Poul Jereensen has gIven the Department of Pmate La\\ IOcorrect mformatlon . .::t fo r ·: '.1m pi.: Exhibit 56-3-1-8 P 8. where It IS stated that Poul Jorgensen does not knO\\ the composit IOn 0t" the LSV executive commmee. In thIS cormectlon Poul Jorgensen has not mentioned that i: \\:l~ actually himself who Ul a number of cases made deCISions In LSVfLEE (for example the dOSSier tab 10) 5.3. The actual application of the funds eranted to LSV/LEE : 5.3.1. Count B.1.10 (Malavsia): 5.3.1.1. Application and irant: On 7 December 1990 South China Sea Farmin2 Snd. Bhd. applied LSY for a donation or" l!SD 2.5 for a "ne~ envIronment and research project TropIcal Forest In ,Ha /aysla " The application was Signed by Kim Bonde Andersen (Exhibit 56-3-1-2 pOe) On 16 December 1990. La Societe Verte (represented by the chamnan Sten Byrner) - \'lth the same descnpuon of the project - applied to the Foundation for DKK i5 m for tlus purpose. statmg that "the project IS to be Implemented In close cooperanon w/1h the all1horrnes In Sabah "(ExhIbIt 56-3-1-2) It appears from the application from LSV . whIch IS worded m English. that allegedly It concerns "a nature protecllon proJect OImlng to sho .... Ihat 1M protecnon of the resources of the rainforest ma:o,;well be combined wah organised. pro nto making explorranon " (application Ul ExhIbit 56-3-1-3 pages 1-9. cf also Exhibit: 1-2 page 60) Allegedly there are also elements of research Ul thIS proJect. because the appitcatlon mentIons also "four theses on forestry " which are to be tested. In a letter of 20 December 1990 to the board of directors of the FoundatIOn. the chairperson Bodil Ross Serensen proposed that the Foundation should pro\lde DKK 15 m for the project The defendant Ross Sorensen stated Ul the letter that "the proj ect IS for the protecnon o f Ih c natural envIronment and In that conneCf10fl a research project a/so fallIng ..... lthln the ob,e" of the Foundaf1on " The defendant also stated that an agreement was to be made With LSV on the unpiementatJon of the project F maUy It appears that the grant can be paid out onl~ \\hen "standard project material can be ""'orked our" Bociil Ross Sorensen then worked out thiS project material and put It before the bo.::~: F J\ persons have affixed theIr sIgnatures to the letter (cf. Exhibit 56-3~1-1) By lettet 008 December 1990 the Foundation (Ross Sorensen) Ulformed LSV that DKK 15 m had been granted to the proJect. <:: A total of DKK 15 m was granted to the project As on 31 December 1991 DKK 3 m had been paId out. As on 31 December 1992 further DKK 5 m was paId out TIus amount was not ful" spent. because the local authontles refused to give the o\\ners of the plantation a 10ggUl£ IJcence. after which the sa\\mJ!1 at the plantation had to close dO\m 11 The ov.ner of the plantation m \tala~ sla \\as a compan~ registered In \1JIl\ 51a. \; asib Da, a (Sabah) Sdn. nus compan~ \'as o\\ned m rum by Sediamas Sdn. Bhd .. which In tum \\~ 5 o\med by South Chma Sea Farmmg Sdn In the matenal presented to the Danish authontle s there IS no mrucatlon that an~ of the defendants . LS\ ' or the Foundation ha\e.:J.I1\ conn~c~ lcn with these comparues 5.3.1.2. The police investigation of the project The mvestlgatlon has sho\\TI that South Sea FarmlIlg Sdn Bhd IS a cnmmercl(ii C'nrC'''pm c' conrrollt!d by the de/endants . and .... ·here tnC profits accrue to tne LG tn'asli ".~ Tnaetur.: [h ;: pa~ments are unlawful (not for a "pub lic utllI ry·· purpose) Operation of plantations in [SS It appears from the dOSSier. tab 7. that the plantation in MalaYSia IS one of se\ era l " sourc es Income to the LG treasury" The forest project IS equal to other " L'SS comparues -- In bud~ cts and accounts for 1990·1992. found :ll search at Sten Byrner or J, r I I I The VSS (CO\verslty of the Seven Seas) IS an organisation m T\lnd. \"hose object. --.uier p urchasing p lantallons and farm S I.) condllCi 01 comme rClOi aC{/I ·;{II!' tn "oll gn .7 ,!)(I\, 1: 1 c development o f Hath the land area and tne local popu iatlon ·· The LSS enterpnses are managed like other enterpnses. \\ here cost targets and plans fo r increasing the opaatlng prufll are set up . cf also the dOSSier tab 24 In the survey ofLG actl\1t1eS (56·3·1·7. p. 43 ff. tab 42) are mentioned 61 different projects under VSS. including No . 234·237. wluch are sa\\mills and sale of wood from :\aslb Da~ ·a It also appears from documents under E\'ldence Exhibit G·2·3 that forest project and sawmill In \talaysla are part of the USS enterpnses. which In turn make contnbullons to LG ' s treasul"\ It appears from documents m EVidence Exhibit G·2-4 that the defendant Arndl Pedersen exercises powers of instruction over "USS i Malaysia". and that It IS cruCial that the plans In \1alaysla are kept due to among other thmgs --the tl me for tne arm:al thc Income .. It appears from the DOSSier. tab 4. that In the autumn of 1992. KiA..? IS to make an IOspeCllon tour to ~alaysla. and that on 20 October. 1992. Sten Byrner and Kim Bonde Andersen explalIl the lIlcome from the plantation in MalaYSia. where the profit amounts to [SO 20 per m3. but where tlus profit may be mcreased. 0'- rl The ownership of the companies involved It appears from the Group Diagram tab 43. P 3. that T\lnd's companies m \1ala\'sla are organised as follows , fairbank Ltd .• Cooper ID\estmenu Ltd .• L~ Ie Enterprises Ltd. Jerse~· South Chin" Se" Fuming S8 S,·end Sorensen Jeep Sagel Pia Madng Jonas Israel Sedimas S8 I I Sleffen Jorgensen Pia ~1adng Jonas Israel ~r Nasib Da~· a S8 Steffen Jorgensen Pia Madng Jonas Israel (ftmer sawmill Other enterpnses \1alaysla In Sa .... mlll licence Thus the o.... ner comparues of the plantation In \1alaysla \\ere controlled by the defendant ArndJ Pedersen vIa Fairbank. Cooper and Lyle In addJtlon. LG ' s Economy. Kim Bonde Andersen and Sten Byrner. could dispose of the operation In Naslb Daya \\lth direct reference to Amdi Pedersen and Kirsten Larsen This appears for example from the dossier. tab 4 and tab 6 . tl Backdatine of documents Documents about payments to the MalaYSia project appear to be backdated . For example. the application to the foundation IS dated 20 December 1990 It appears from Exlllblt 56-3- I -I p 2d that on 5 August 1991 Blrgme Lerbech Larsen sent the apphcauon to chanered account.:lnl Erik Romer Jensen as documentation that DKK 17 m had been granted to the two projects In ! ')90 On 6 August 1991 chanered accountant Enk Romer Jensen adVISed Birgme Lerbech Larsen that It was only certalIl that the allocation was deductible If the reCIpient had been tnformed about the decIsion. A contract therefore had to be dra.....n up with IF AS It has been added In hand ....ntlng: " before 3I i I2-90·· - E:Jl1blt 56-3-1-1 p. 2a The first payment to the project was made on 31 December 1991. that Is ·more than a year after the deCISion \\as allegedly made . ~. The actual application of the funds of the Foundation The authontlcs III Malaysia hon e had no control \\'Ith \\ hether the funds from thl! FouhCl.1t1cr. were spent on nature preservation or on research It appears from E\:.hlblt S6-3-1-8 p ... that t: •.: Darush Embassy III Kuala Lumpur has 1m estlgated dus Issue. and that neither thl! Fedl! r:ll Forestry Department nor the local authontles In Sabah ha \ e an~ knowledge of the prOlect (E\ldence Exhibit G-l-l) . Of the funds actuall~ paId. the maIO part has been applied on the purchase of th.: compan \ Naslb Dava. cf. the statement m E\:.hlblt 56-5-1-5 P 9 Thus the funds ha\ e actualh not been spent on ~ature preservation \10reo\'er It IS the Prosecutor' S ImpressIon that other br~..: amounts m thls project have been spent on qUite Irrelevant purposes Of the on'ZlnallZrant ofDKK IS m a pa\ment of OI\.l\. 7 ~ m was made Ho\\e\er. onh J small am;unt \\-:-as spent. cf Exhlblt 56-3-1-3 p. 11-12 . It appears from trus lener from LS\ te' the Foundation that the "excess" amount. liSD 577.861. can be paid back In a number of U1Stalments over three years TIus shows that the money has been spent on other purposes Chartered accountant Erik Romer Jensen established thls at" the audmng of the accounts of the Foundation as per 1993 . notmg that to tum It was " lncomprehenslble that the money ~as no r Simply pO/d back ", cf. ExhIbit 56-3-I-S p 55 . Howe\'er. thls has not caused the chartered accountant to make a report III the accounts of the Foundation. Part of the grant applied to MalaYSia - FF 367.800 - consIsts of consultanc:- fees etc for . Jambalaya Ltd .. cf Exhibit 56-3-1-5 p 5 It does not appear from LSV ' s accounts what role the company plays or what the money has been spent on However. Jambalaya Ltd appears 10 the Group Diagram of the T"md Group. tab 43 p 28 . It IS a company registered 10 Hong Kong. whose aCtl\lt1eS are stated to be "proJect management"· for LSV and LEE The company is owned b"y by Jayhawk Ltd. and Buckeye Ltd. It appears from the group sur.e:- . p. 9. that these comparues are In tum owned b~' Fairbank. Cooper and Lyle. I e by Farmers Trust. It seems that other large amounts for the proJect. approx CSD 440.000. have been spent on purchasmg flats m Mlanll. wrule about USD 2S .000 was transferred to K1rsten Larsen personally . On 24 Janu:lr.' 1992 a sum ofliSD 846.000 was transferred from the liSD account In Bikuben, Copenhagen. belongmg to the Foundation. The pa~ments are booked In the Foundation on account 4009. wruch IS headed " LSV - Tropical Forrest ,. Of the amount. L!SD 346.000 was placed to LSV 's account In Baiclays Bank. Pans . 'I On 27 January 1992 the balance of L'SD 500.000 \\as placed to an aC\.Jwlt In Barclays BJl1k, Mlanll. belongmg to Sten Byrner (m hiS capaclt~ of chairman of LSV) On a document of:~ January 1992 Bodil Ross Serensen has stated the purpose of the pa~ment to be "support to a proJect",The balance of Sten Bymer 's account was raised by the transfeF «)-approx . liSD 510.000. and the follOWing da~ - 28 Januaf' 1992 - Bymer transferred L'SD ~~ o . o I 0 to th~ estate agents Kline. Moore &: Klein. Mlanll . The amount roughly matches the down pa~m~nt on flats III The Sterlmg. Miami. \\'ruch were bought by Chilton Intervest Corp .• cf tab ~~ For one of these purchases Svend Serensen (at the same tune manager In South Cruna Sea Fanrung) Signed surery for a loan for the purchase The flats m Mlanu have since been tnhablted by members of the T"lnd management· It appears from the Group dlagram p I 7 that Crulton intervest Corp IS a compan~ o\\TIed b~ FaIrbank. Cooper and Lyle . , I Addmonally. an amount of LSD 25.020 was on 6 Februar- ! 092 transferred from B\ rnc~ ; account III Barclays Bank to Kirsten Larsen's Amenc:m E:xpress account In Sun B~ . Mlanll . Conclusion On tlus background there IS probable cause to suspect that funds for the \iala'·SI:l prOject h;l\ e been p.ud to purposes whIch cannot legally receive money from the Foundation. and th:lt . deductions have also been unlawfully made III the ta"l: returns of the Foundation fo r p:l'mems and prOVIsions for the proJect 5.3.2. Count B.1.9: Biogas plant French Pol"nesia 5.3.2.1. Application and grants By an apphcation of I October 1990 the LSV apphed the Foundation for fin:mclJ. 1 s ~ppo r. to an amount of OK1\. 2.500.000 for establIshIng a blogas plant III French Pol~nesla The applIcation IS worded III English III Pans and Signed by Sten Byrner t .. a It appears from the application among other thIngs that local fanner has applted for financial and techrucal support from LSV for solVing a pollution problem. It also appe:m that \ir Stem operates a large fann m Taluti. \\lth a livestock of approx . 1000 pigs and about 20.000 pcs poultry. According to the tnformation the local authorities have ordered Mr Stem to do something about the resulting pollution. It also appears from the applIcation that LSV has not applied to other foundations because LSV is of the opmlon that only T vlnd: s Humanlt.:man Foundation \,,;11 treat LSV senously. According to the application LSV has "decIded" to carry the costs of building a blogas plant on Mr. Stein's prenuses and to employ Mr. StelIl dunng the construction penod The purpose is to protect the em;ronment from the pollution from the large number of anunals and to convert the manure lIltO energy. thereby hemg a model for the other fanners It appears from the rrunutes of a board meeting III the Foundation on the same dJ.~. I October 1990, that the board - after thorough diSCUSSion and havlIlg espeCially made a pOint of the pnmary benefit to the natural environment - deCided to grant DKK 2.547.000 to the proJect. cf Exhibit 56-3-3-1 . According to an undated application. LSV represented by Sten Bymer appiJed for further funds, so that the total grant amounts to DKK 4.518.000. cf Exhibit 56-3-3-2 B~ letter dated 20 March 1991 the Foundation represented by the chairperson Bodil Ross Serensen repiJed that th~ application could be granted. The board meeung was held on ~O Ma~h 1991 By agreement of 9 December 1992 LSV represented by Lars Jensen borrowed DKK 309.000 from F~lleseJe represented by Poul Jergensen for the use of the proJect . The amount was to be repaid at the latest on I February 1993 . .cf Exhibit 56-3-3~2 . By letter of 21 December 1992 LSV applIed for a further amount of DKK 309.000 from the Foundation. It appears from the rrunutes of 31 December 1992 that the Foundation has received an application - III the first Illstance verbally - from LSV represented b~ Lars Jensen to a further amount of DKK 309.000 for the ·'"proJect". among other things as 3 consequence of extra expenses for consultlllg. travels, etc . AccordlIlg to the rrunutes the grant has been deCided by the board of the Foundation on the basiS of some memorandum . By letter of 31 December 1992 the Foundation represented by the chairperson Bodll Ross Sorensen announced that the applIcation for DKK 309,000 had been granted On 7 Janu3r-· r. _ 1993 LSV asked the Foundation to oay the granted amount of OKK 309.000 to Fxllese :;: 0:1 26 Januaf'\· 1993 Poul Jergenseli _~nfinned on behalf of the Foundation that the :un0U~: hole been paid to Fa:lleseJe B\· lener of 25 Januaf'\· 1993 LSV represented by Lars Jensen applied to the Foundation for further support. so that the total support amounted to OK]( 5.778 . 795 B~ lener of 2 l Februoll"' 1493 the Foundation represented by the chamnan Poul Jergensen stated that the a;:pllCaU011 for OKK 945.000 had been granted It appears from the mmutes of the board meeting rnat tn.: deCISion was made on 20 FebruaT\ 1993 . B~ lenerof25 FebruaT\ 190 3 LS\·. repr;:sc:nted h Lars Jensen. requested the Foundation to pay the amount to LSV 's account 2 JCl 2:, 86 55 I In Cmbank Miarru and account 72890500101 m Barcla~·s Bank m Pans 8\ lener of 13 Ma\· 1994 LSV represented by· Lars Jensen asked the Founcl.1tlon for a funhe~ p~~ment of OK1\. 170.000 for the prOJect. By lener of 22 \1a\ 1994 the Foundation represented by the chamnan Poul Jorgensen replied that the applIcation had been gr:lIltcd 5.3.2.2. The police investigation of the project The m\·est.llZatlOn has Sh0\\11 that the final recIpient of the funds from the Founcl.1tlon. \tr Stem. IS a personal mend of the defendant Amdi Pedersen and others By the deCISions In th~ Foundation described. support has been given to an tndl\l/dual. who carries on commac:ai act/vlry Therefore the payments are unlawful (not "public utility") . Protection of nature Hans 1a Cour has explamed to the police (Exhibit 54-5 p. 35) that he had no first-hand knowledge of the proJect. but that In 1993 he had ViSited Stem on Taiutl, where he met Lars Jensen. who was Tvmd's "Mr. Fix It'" He has later spoken to Stem ·s son. who had said that the plant never became operational. It appears from Hans la Cour' s wnnen statement to the police that Amdi Pedersen and Kirsten Larsen orIgInated the Idea of the project and convmced Stem that the blogas plant was the solution to the problems he had With pollution It appears from an e-mail from Hans la Cour to Stig Jergensen (Exlublt 54-2-14) that ongtnalh ArndJ Pedersen met Stem at a round-the-world tnp. and that Arndl Pedersen and Ius fello\\ travellers stayed for SIX months at Ius estate. Arndl later returned and VIsited Stem. who has also visited Derunark. Walther Juul Hansen has similarly stated to the police that together "lth Arndl Pedersen and seven others he participated in a round-the-world tnp m 68/69 In August 1968 the group amved m Tahiti . Here they met Stem and Ius farrul~ . Stem made a site avatJable to the group where they built a hut, and Stein supplied them \\lth foOd . They· stayed there for about a month until they were asked by the French authonnes to Il2ve Taiuu (Exhibit 54-m the Darush authontles. It IS demonstrated for example b~ the Department of Pm :lteL:l\\ deCISIon of26 June 2001 that Poul Jorgensen had surrendered a document from \\hlch It appeared that ··we". I.e LG. bought Jatoba In 1991 It seems that Uus document was surrendered to the Directorate by a nustake. In any case the defendant Jorgensen anempted to remove It from the file of the authontles dunng a meeung The defendants have also anempted to conceal that tn a number of cases the texl In the applications has been prepared tn cooperiltlon between the "applicant" and the chaIrman of tn~ Foundauon and the persons responsible for LG's economy . It also appears from a .. ItS! of assIgnments" prepared by Ruth 5eJeroe-Olsen and Marlene Gunst that In cormectlon WIth later appiJcatlons - an application of I ~ November 1998 - It lies "lth Poul Jergensen to \\ me tho: cover leners to be forwarded mth the appiJcatlon to the Foundation. It appears from the eXanlples In tab 19. tab 20. tab 22 and tab 23 that Poul Jorgensen also defac(o has formulated both appiJcatlons and leners to the Foundation. that IS to Poul Jorgensen himself. concerning the proJect. The actuaJ application of the funds of the Foundation: l ... r- • The funds for the purchase of Floryl Florestadora carne from two sources ' (1) F rom Bahia Fanning Ltd., which was a company newly estabhshed for the purpose under Fairbank. Cooper and Lyle. In connection "lth the purchase Bahla Famung received a number of transfers from a number of TVUld's comparues and associations. tncludmg L"FFlHumana. and from LG's treasury . (2) From La Societe Verte, which in rum was financed b~ Tnnd 's Humarutanan Foundation. Regarding the applIcation of the funds from the Foundation, It appears from the appiJcatlon of II December 1992 that the funds from the Foundation shall primarily appear (be entered) as a loan. whereafter the anlount is to be con\'erted tnto a donation to the company. Ther ~ ..Jre It appears from the application (Exhibit 56-3-4-2 p. 18) that the first part of the grant - L;5D 750.000 - IS to be spent on the purchase of the plantation. while the money for the follo\\lng years IS to be spent on support of the proJect, I.e. the protection of nature. The Foundation has also wormed the authontles that the grant had the narure of a loan. This was observed by the chartered accountant of the Foundation. Erik Romer Jensen. In 1998 . In a lener of 6 Apnl 1998 the accountant wormed Poul Jorgensen that a loan could not result tn tax deductions At the same tune the accountant suggested "renanllng" of the pa~ments to Floryl to a "subventIOn -"llh ablrgallon o.f repayment In (he form of royalty ". cf tab 18 Prelurunary investigation of the cash flows shows that a large part of the funds from the Foundanon has been spent on dO\\ll pa~ment and current pa~ments of Options to the seller. 3'ld ~t the bulk of the anlount paid - USD 14m - has been spent on covenng costs Without any cormection WIth a possible protection ofnarure at the estate. All transfers from LS\'/LEE have been entered at the recIpient - Floryl Florestadore - as "loans" or as "funds for future. addJtlOnal capltaj" The reason behmd these entnes was that T\lIld did not WIsh to pay ta.x of the money in Brazil, cf. tab 32 . The Investigation has also shO\\ll that part of the funds paid to the Flo~' 1 prOject has been spent on qUIte different purposes . Thus It appears from the documents under tab 27 that there IS a discrepancy of USD 496.000 between the amount paid by the Foundation and 'the anlount receIved m Brazil accordmg to the books . The dJscrepancy IS stated to be for example "management fee .. and "(ravel expenses .. in LEE totalling USD 325.000. Since LEE - as stated above - IS a "brass plate company" \\lthOUt any form of operations, Uus is proof that these funds have been spent on other purposes . It appears from the Sanle exhibit also that answers to questions from II authontles are III reality prepared constructed b\ others than the founciluon m3JlJ.gt! m..: n: . .I" casu Kirsten Fuglsbjerg (}(f) . and that the deficit In the books for 1()Q~ IS e\:p iaIn~ b\ expenditures allegedly effected subsequentl~ It also appears from a draft for audJtor's records for LEE of 1 July 1995 (tab 10) that In l~ "~ m COMectlOn ",th the proJect. loans have been granted to an amount of L'SD 176.000 to Eastover Properties Ltd. and Furtherland Fanning Ltd. These two companies are registered on Cayman Islands . It appears from the Group Surve~. tab ~3 p 8 that Furthe r:.J.!1c Famung IS o\\ned by Kirsten Larsen personally ",th ~O~o and by Ca~ Properties Ltd b\ 60% - As per I September 1995 I\.lrsten Larsen 0\\n5 Ca~ Properties \\lth 96° ° Correspondmgly. I\.irsten Larsen personall~ o\\ns 98°10 of the parent comp3Jl~ of Agncorp Ltd., wruch III tum O\\TIS Easto\er Properties Ltd In a letter of 6 \1a~ 1995 from I\.l rsten FuglsbJerg to Poul Jorgensen (tab 10) It IS stated that "the section about Cay man / 5;'01.'/ .'") c deleted '· from the audltor's records t... Fmalh it can be mentioned that It appears from the documents under tab 23 that an J.pp ilcatlon from December 1998 for pa~ment of LJSD 100.000 to the power plant at latoba IS a fabncatlon . In reality the money was to be used as " bl~(rer In a mortgage paym"nr to be madl' Wednesday ·· Operation of the enterprise until 2000 the plantation III Brazil was rronaged by Lars Jensen, who at the same tune was chamnan of LSV and LEE This does not appear from the documents to which the authonues have had access . It appears from the dOSSier, tab 28, that on 19 September 2000 the defendants Pedersen and Larsen deCided that due to unsatisfactory earnings on the estate, Lars Jensen \\as replaced as seruor executive by Seren Serensen (uP to then head of LG ' s production enterpnses in Belize) . In COMeCtiOn With a laWSUit concerning the construction of the power plant on the estate, Poul Jergensen has acted as legal advisor for the o\mers of the plantations, cf the dOSSier, tab I I In this work Poul lorgensenhas also acted under instructions from LG 's Economy (m casu Anne Hansen) . In 1999 the Danish tax authorities m cooperation with the local authonlles carned out an investigation of the Floryl project The Brazilian authorities concluded that the opc:rJ.t1on of the plantatlon was commerCial, and that there had been no (or 'ery little) planting offorest. CitruS plantations, or other crops to replace the Intense forest cuttmg at the plantatIOn E,"en though the enterpnse might ha\'e developed and Implemented a system for electricity production by explOiting felled wood (such as It IS stated a.o m'the apphcatLOns to the Foundation), everythIng mdlcates that the management on site has only mamtalned forest planting and felled trees that were npe for this f Instructions concemin& the operation: It appears from a number of exhibits discovered m secured computers at TVlnd that grants to the plantation are managed by Ruth Sejeree-Olsen and Marlene Gunst. but under lllstruCtiOns from Amdi Pedersen and I\.ll'Sten Larsen (KLAP) As mentioned, Amdl Pedersen has stated In a letter of 19 September 2000 that the purpose ofLG's o\\nersrup IS mamtenance of the value of the estate and mallltenance of the thmrung out of the forest and controlling production profitability - and to cut and sell the ttees when the\· are ready Amdl Pedersen sets the goal that prod~ctlmy must be lllcreased by 200%. the ~\"ages mu~t be cut b\· 62% of the present wages, the debt must be liqUidated, and the accountancv must be reVised so that "one can set: that there IS a profiT ·· The sale of wood from Fazenda Jatoba IS partly effected under AmdJ Pedersen' s personal control through a compln~ "One World Ent;!~m~·· responsible for wood export for furniture prOduction Ifi (tuna , Conclusion On the background of the foregomg there IS probable cause to suspect that pa\menrs to th.: Floryl project have not actually been used for publIc utilIty purposes . let alon;! to ··p rot;!ctlor. of the natural ennronment"' Thereb~ the pa~ments are unlawful. and deductions for allocations and pronslons In the accounts of the Foundation h3\e been m.Jde uni.J\\fulh Ks 6. Allocations to humanitarian purposes 6.1. Applications and grants: ThIs summary of the case does not compnse the grants from the Foundatlo.n In the period I \.l(. • ' . "' (100 for humarutanan purposes These counts are - like the mam part of the other counts - std. ;e!Og In\estlgated. and therefore It cannot be excluded that In these more recem pr0.l ec ts . humamtanan purposes have actuall~ been Subslcllsed Lnul further It IS noted about these c~~nts that In the penod after 1997.the Found:ltlOn has . preferably SUbSIdIsed the " Federatlo~ (CFF;Humaru). and that the detFendant \! o~ ens .~U I Pedersen and the management of LG s Economy seenungly dIctate the ounctmon Do:ud U1es;.' crants . whIch to a certain. as yet unclanfied extent. are tnggered b~ fictitious applIcations 6.2. police investigation of the projects: Lnul further It IS noted that also regarding pa~ments to the Federation (LFF Humana ) there IS number of Irrcgulantles In the adrruOlstratlon of the Foundation For one thing It appears from E\ a Vestergaard's lerter of3 January 1997 (tab 15) that RJkke (Viholml IS the person \\ho apphes to the Foundauon on behalf of the Federation. and that her lerters are to be ",nrten b~ others. because she IS co-founder of the Foundation. . J It appears from a number of other documents found by searchmg that the Federation m:lkes substantial contnbuuons to LG ' s treasury. and thilt trade In second-hand clothes IS not In the nature of a humarutanan effort. but that the trade takes place "on a commercial OOSIS dl rec( ( (l LG 's treasury ' cf tab 29 The Invesugatlon has also sho\\TI that at least liSD 270.000 has been paId from the Foundation to the defendants Amdi Pedersen' s and' Kirsten Larsen ' s enure dIsposal under the prete\."! that It mvohed support to the fight against AIDS etc .1n Afnca It appears from the dossier. tab 31. that there IS an e-maIl message of 27 Februar 200 I from the defendants Ruth Sejeree-Olsen and '1arlene Gunst to the defendant Poul Jergensen st.ltlng among other tiungs • We have talked fO KLAP and agree .... ·/(h (hem The Foundation grants USD 100.000 Today (he Foundallon has a fOlOl 0/1 60.000 CSD In cash We make an applicatlofl o f L'SD 100 ouO (rom TCE the Federanonfor expense~' In connecnon .... lIh p"b li catlons and sm~1I expenments In connecnon ..... lIh TCE. The money .... /1/ be available on 1 March We have .... n {{en fO ,'.,fana Darsbo ' YOII mllst make an application (0 the FOllndanon no .... l or (he 100. 000 L'SD ( J r OIl mllst agree with PJ ho .... (hIS must belormll ioted. And ..... e kou id like y oulQ·",ake (h~> applicOflCln (7( once and send If to the FOllndaflon hy I! -mail. 50 (ha( (he.,' can have a meenng k'lfhoUl delay Prderab/y tomorro ..... evemng. so (hot KL4P ac(ually have (he money made avO/ /able . "TCE" IS an abbreviation for "Total Control of the EpIdemIC". TVlnd 's anti-AIDS progr:unme In Afnca Mana Darsbo IS the sentor executIve of the Federation (LFFlHumana) It also appears from an e-matI of I~ ~la\ 2000 from the defendants Ruth Sejeree-Olsen and \larlene Gunst to the defendant Poul J~rgensen. that \th "We are preparing a grant n( CSD J -O.Ouc/from tne FOllna(l{;nn t(J th .. F'J .. · r,~ I;C) I · ' ;\ ;'," \\'e have decIded the contents of the oppltcoflon. tnt' HQ (Jr t! i t ' a::n': cc I, :1:' I , r ;/ l ' :: ,m ,: :" , ,. the Foundanon \4 Iii have a ooard met!tmg. andtne mone} . . . lii /ncn be paid Thi s ml'OI ~ , :,:,7' In about a week thc FOllndaflon II. III pay CSD 1-0 000 /(l tn ..· F ..·dcro fl( )I; (thl! n1:ln:lg.:m.:::: ;: :' GFFlHumana (the author's note» . '.lOll. YOII art! 140rncd ( [,SD I iOOf) O ; ~ : (i r tne :.. · .h· r, ~ :"" · and L'Sp 60.000 IS/or GAlA 's containers. hilt "t' taKe If \';a tnl' 1~'dl' r,7 r:(Jn 10 ' / 'l7rl ; ':. Foundanon. and then It IS be"" een the Fcderaflon Pianct AId and GAlA II. l' ~rL"? r.. ,~ rl .. ~: :" ' · . 14e take If thaI that 15 ho\\ yO/l prefer II " The defendant Poul Jorgensen (and Dorthe S\'endsen) rephed to Uus message on :8 \13 \ . 2000. that "we" had received an application from the Federation. which \\as no good. bu t nOlI another. much better had been received The money was transferred to the Federation ' s account Ul BG Bank. Copenhagen. on 28 May. 2000 The circumstances concerning 1997-200 1 are sull bemg m\estlgated t .. r • 7. Conclusion In all the counts descnbed above the prosecutor finds that there IS proof th:l{ the fonna l management ofTvmd ' s Humal1ltanan Found.:mon acting on instructions from \togens .~d l Pedersen (and Kirsten Larsen. who cannot be separated from Amdl Pedersen) hJ..S paid tunds to purposes which are not of public utlli~ . or which at the same time h:n e the nature cf support to humarutanan purposes. promotion of research or protection of the natura l en\·lrorunent . Thus It IS a common feature for all projects from 1987 to now that no maJor decIsi ons on tn.: Slrua!lon of the Foundation are made mthout "KLAP" bemg un-olved. and that Amdl Pedersen exerCISes hIs authonry on the Foundation through "LG' s Econom~ ". I e 10 th;! penod 1987-1992 na Sten Bymer and then Ruth SeJeroe-Olsen and Marlene Gunst The purpose of the pa~ ments has been to obtam an unwarra.t:tted gam for the defendants themselves or others - 10 the last reSOll a gam for the common econom~ 10 T\·md. " LG ' s treasury t Pl\ments to "promotlon of research .. The pa~ments 10 1987-1991 have been effected \ 'Ia IFAS . which IS not - as represented by the defendants - really a research organisation. Thereby It can be assumed that the funds have been unlawfully paid. and the actual gomg over of the projects that ha\'e recel\'ed sub\'entlons also demonstrates that no funds have been specifically spent on "research" On the contra~ . all funds are gomg b~ck mto the LG treasu~' Pa\ments to "suPPOll of the natural envirorunent" The pa~ments 1992-1998 for nature purposes were effected via LSV and LEE. which are not Ul reality - as represented by the defendants - associations engaged In nature preservation Thereby It can be assumed that the funds have actually been paid unla\\full~ . and the actual gomg over of the three projects described 10 this prelimma~' statement does not dispro\e the assumption . r • Courit B.1.10: The funds have been spent partl~ as capital for the USS-o\\ned plantation 10 \1alaysla. which IS a commercial enterpnse. partly on Irrelevant purposes. mcludmg the purchase of flats m Mlaml and pa~ment to Klrsten Larsen personally. Count B.1.9: The funds have been spent on SUppOll of a s10gle mdlvldual. Mr Stem. who operates a commercial enterpnse. and they have been transferred to the free disposal of the defendants . Count B.1.11: The funds have been spent pallly as a capital pa~ment Into the L'SS-o\\ned plantation Fazenda latoba. which IS a commercial enterprise. and palll~ on Irrele":lIlt purposes . The funds in these counts have consequentl~ not been spent on SUppOll of the natural en\1ronment. as stated to the authOrities . Pa\ments to humal1ltanan purposes 5-22 (Linder In ....estlgatlon) In all instances Uus case summary cItes numerous pIeces of endence that In J large numbe~ 0:· cases the defendants have prepared fictitious applications In order to conceal from both the . Deparonent of Pnvate Law and the Customs and Ta'X Authontles that the funds of the Foundation are not spent \\lUun the lega,l area. and that the formal board of m:lI1agement or" th.: Foundation does not make deCISIOns concernmg the application of the funds of the Foundation. On the contrary. the Foundation IS managed by the defendant Arndl Pedersen Consequently the prosecutor also.fmds that there IS probable cause to suspect that the are guilty of embezzlement of the Foundation. and that the deductions In both th ~' contnbutors · mcome (wluch are tnggered by the approval of the FoundatIon pursuant to section 12(3) of the DanIsh Ta'X Assessment Act) and the deductions 111 the tax returns ofth.:Foundation are Incorrect. and that the \\·hole operation IS an expressIOn of a ta'X construct Ion budt on Incorrect. mcomplete. or n1lSieadmg mformatlon on the tax cIrcumstances of both the contributors and the Foundation defendant~ The Public Prosecutor for Senous E.t:onoml~ Cnme The C1u5( ~b~le In HO,~tebro I Date: 29 November 200 I J.nr SA0K 278/00 - PG f ers/3f'--------. hl7}Fin B r _. .1. J v 86t~S ~CJ ___,v. tj ) iJ j \ r • ~ W, The Court in Ringk0bing Transcript (rom the Record On I I December 200 I at 0 I 00 pm the Court In ~ngkoblng was opened b'. Judge _ L b r" \; Ielsen In the meetml! room on the tust floor of the court bulloln!; ~tl!cn 0\ .Ie 5 . - 55 38~ : : OOI-I:-2" The Prosecutor \10l2ens Amdl Pedersen. cpr-nr 090139-1645. departed to Great Bmaln. For the Prosecution appeared deputy public Prosecutor Poul Gadt!. The Public Prosecutor for Serious Economic Cnme. and detective supenntendent Mud .-\a Ha.lrga.lrd J Quade Andersen. solicitor. Heming. appeared as assigned counsel for the: defence The Prosec~tor requested that the doors be closed The Prosecutor referred to the fact that the case Involves a request for arrest and search In connection with a defendant. and that the publlcl~ of the court session \\Quld decIsively prevent the eVidence of the case. cf section 29(2)(3 ) of the Danish Admlrustratlon of Justice Act The Prosecutor further requested the Court from pre\'entmg the defendant from being acquamted With the entry m the Report. and the Court should order the counsel for the defence to refram from mformlng the defendant of proceedmgs at the heanng. cf section 748(6) of the Danish Admlrustratlon of Justice Act The asSigned counsel protested against the Court allo',nng an~ of these requests Then Court made the followmg ORDER: For the reasons stated by the Prosecutor the Court finds that the pubhcl~ of the .;:ourt session must be assumed declslvel~ to prevent the eVidence of the case The conditIOns for c10smg the doors are therefore present. cf section 29(2)(3) of the Danish Admmlstrauon of Justice Act. for which reason it is ordered tha 't: The doors be closed. EXHIBIT V 18}; mm bu ~ e: of 15 The doors were closed at I O~ P m e Court declared that pursuant to section 7~8( I) of the Danish Admmlstratlon or ~ct the defendant has not been mfonned of the present coun session. :md Jus tlce ..... ehind thIs which have also been Cit ed Ul support or" CIosmg th e doors . ,he reason S b . , . pre\ entlng the defendant from beUlQ acquauned With the entn In the - . . also .la\ our the same reasons favour the Court s ordenng the counsel for the Reco r d . an d Ul from InfortrunQ the defendant of the proceedmgs at the heanng. defence t 0 refra " t on 7~8(6) of the Darush Adrrurustratlon of Justice Act .:1 sec I Th The Court then ordered that the defendant should be pre\ en ted from bems with the entn' In the Record. and the Court also ordered the counsel to acquam ted . " rr " om Infonrung the defendant of the proceed1OQs at the heanng. cf section rcrr:lln ~.l!!( 6) of the Darush AdrrllOlstratiOn of JuStice Act :\ letter dated 281\ 2001 from the Publtc Prosecutor for Senous Econorruc Cnme. the Case Summary as per I II 200 I and a nng b10der \\lth exhibits were then produced The counsel for the defence also produced a legal opUllon on the concept of publtc utlh~ In ta." law by professor. dr Jur Erik Werlauff. The Prosecutor then requested that pursuant to section 762(1)(1) and (3 ) of the Darush Adrrurustratlon of Justice Act the Court should direct that the defendant \loQens AmciI Pedersen. who is not present m thIs country. may be Impnsoned In abs~ntla. so that \\l!hm 2~ hours after being taken mto custody m thIs country he ma~ be arraigned Ul court, cf section 764( I) Furthennore It IS requested that pursuant to section 796( 2). cf section 794( II and section 795( I) the Court should order that \nth the assistance of the compdent ludlclal authontles m the Umted States searches may be made at the reSidence and 'busmess addresses and a number of other addresses 10 Mlanu. Flonda as stated In the lener produced. The Prosecutor stated that Ul the penod after the search on 25 April 200 I the 100'estlgatlon has led to probable cause to suspect that money from Tvmd ' s Humarutanan Foundation has been transferred to a number of comparues and Indl\1duals so that in reality the money has been transferred to the defendant Amdl Pedersen 's free disposal On · thiS background the chief constable Ul Holstebro deCided on 28 November 200 I to mociIf:. the charge agamst Mogens ArnciI Pedersen so that henceforth a charge IS made With the follo\\lng counts m the \\'a\ these charges have been expressed m the lener of 28/ 11 .200 I. VIZ .. . Count I \logens Arndl Pedersen IS charged \\lth embezzlement of a particularl\' aggravated nature . cf section 278(1 )(3). cf section 286(2) of the Darush Crurunal Code, or of comphctry to thIs. cf section 23 of the Damsh CnrnmaJ'Code. h:mng Jomth and b~ prevIous agreement With Poul Jorgensen. SociI I Ross Sorensen . Eva Vestergaard. among others. for the purpose of obta101Og for :md .........;,..ge 3 of 15 elf or for others anunla\\ful gam. m· the penod bet\\een Januar;. 198" ana hlms 7' m. \\ hIch amount \\as paId to .The! \1arch 200 I unlawfully spent appro\: D1't' IV\.:Foundation for the Support of Humanltanan .~urposes , the Pro,:",otlon of R~searc h, ~d the Protection of the ~atural Eo\ lronment . Skork~r.eJ 8. Lltborg. the defendants \"Ia allocations from the Foundation. In whIc h the h ~ · j.:rendan tS had a controlling IOterest, an d m contra \ entlon 0 fth e statutes or- UK' .J~tlon. effected dIsbursements of entrusted money to an amount of toulh F~ L' l ' 7~ m of wtuch thev took. possession m .~. ' . _ 1. uuS manner, thereo\ :1 bou t D~ , " ' ..u.:m -~ ad\'antalZe of the access created for themselves to legally bmd the Foundation. m finanCial maners \\ hlch the\. acong C-ontrar., to the mterests of the Foundation , \\ere bound to watch over. all under the tolIo\\mg speCific circumstances In the period bet\\'een 1987 and 200 I a total of approx 300 persons paId a total of appro, DKK 70 m to the Foundation pursuant to obltgatlons that the pa~ ers had assumed accordmg to deeds of gift ISSUed. In the penod when the crune was comrruned, after applications to the Foundation prepared by the defendants themselves. these fu.nds with accrued mterest were paid to \anous reCIpients, under the pretence that thereby the Foundation supported purposes of publIc utility \\lUun the objects clause of the Foundation \one of these reCipients could nghtfully receive pa~ments from the Foundation. stnce the funds were not spent on purposes of public utilIty On the contrary. the purpose of the pa~ments was for their personal gam to transfer the funds of the Foundation to the defendants ' own assets. to grant finanCial aid to \entures controlled by the defendant Mogens Amdl Pedersen. or to favour IOdl\lduais. mstltutlons or corporations which were either controlled b\ the defendant Pedersen. or wtuch by Virtue of agreement. econorruc ~SOCI~tlOn, onzarusatlona! asSOCiation. or 10 other. stmtlar manner were closeh related to or had close community of mterests with the defendants. and which 10' reallry did not spend the funds on purposes of public mterest. whIch at the same time were m the nature of humanltanan purposes. purposes of promotion of research or protection of the natural environment. Hereby the defendants caused the FoundatIOn a loss of approx OK1\. 75 m. \\hll e the defendants for themsel ves or others obtamed an unlawful gam to the same amount Count 2. For tax fraud of a oartlcularh' aggravated nature. cf sectIon 289 of the Danish Cnrrunal Code. cf section 13 of the Darush Tax Control Act, or complICity hereto. cf section 23 of the Darush Cnnunal Code. . han ng m the tax returns for the Foundation m the penod 1987,2000 made tax deductions for allocatIons and prO\1Slons amountIng to approx. DKK 85 m. and b\ subsequently furrushmg the ta\: authontIes WIth mcorrect, mcomplete. ;r mlsleadmg mformatlon on these allocations and prO\·ISKlns. \\hereas under the cIrcumstances mentioned 10 Count 1. for the purpose of tax e\:aslon. the defendants have mcorrectl~ stated that the deductions mentIoned \\ ere ~. pi -.....-/ Page 4 of 15 lIocatJons or pro\,SIOns for purposes of public utlh~ or slmliar. so that on a ntloned were deduCtIble. cf section 4( I) ' and section 4( 4) of thl:! the expenses me of Foundations Act. \\hereb\ the pubhc purse \\as depmed of DaI1lsh Taxation . " DKK 28 m ro lPP' Count 3 b;l.Sed :\ fr::lUd of a particular" aggravated narure. cf sectlon 289 of the D:uush For h1- Cod cf section 13( I) of the Darush Ta\: Control Act. or comphcl~ Cnmmal e. I Cod sectlon 23 of the Danish Cnnuna e. hereto. cf th ta\: rerurns for the contnbutors of capital to the Foundation Ul the g\l!1S 1~987~2000 furrushed Ulcorrect. Ulcomplete. or rrusleadmg mfonnatlon penod the dedUCtions of the contributors for the current pa~ments to the -oncernmg ... da n under the followUlg speCific circumstances: Foun tlO when the Crime was comnuned the defendants caused approx . 300 In th e pe nod to Sl~ !lIft certificates to the foundauon. wblch had been approved as conm butorsf ta\: pm - -,Ieged contnbutlons. cf section 8A and section 12( ~~) 0 f th e reclplen t O -0 f th h Ta\: Assessment Act. UlducUlg these contnbutors to transfer 1:- 1'0 0 elr ~~~es. but not less than DKK 15.000. annually to the Foundatlon. to a total ~ount of about DKK 70 m Subsequently. for the purpose of tax evasion. the defendants effected the preparation of tax rerurns for the contnbutors. In which deductionsD~~~;e7made for the pa~ments to the Foundation to the amount mentioned of approx . "-l' 0 m The defendants knew that these deductions were ' unwarranted and the Uldi"lciual u, rerurns consequently Ulcorrect. because the defendants dId not Ultend to spend the funds of the Foundation on public utility purposes. wluch Ul fact did not happen. cf for detatls under Count I in the foregoUlg. and because the approval of the Foundation pursuant to section 12(3) of the Darush Tax Assessment A:ct by the ta.\: authonues had b~n obtained fraudulently Hereby a loss of not less than DKK 35 m was mflicted on the public purse Regarding the basis of the charges the Prosecutor referred to the letter. stating that the background of the modifications to the charges is that the Prosecutor now finds that many seized materials give probable cause to suspect that not only have the funds been spent inconsistently with -the public utility purposes. but that at the same time the funds have been transferred back to the defendants own assets or to institutions controlled by the defendants in a manner whereby they obtained a gain for themselves at the expense of the Foundation In addition to this the charlZes concerninl.! tax fraud have been extended to involve two forms of tax fr~ud. because ~ has been established that not only do the defendants appear to have had a decisive influence on the deduction in connection with the allocations of the Foundation. but also on the deductions made bv the contributors in their tax returns It is true that the defendant MOlZens ..\mdi Pedersen did not make these deductions in his own tax returns. -but the T"ind community as such appears to have prepared the deeds of gift. and possibly the individuals who 1 1( -.e 5 of 15 ' ........,/ - , , I made the deductions did not know themsel .... es that the deductions v. ere made unlawfully. but probably only followed instructions from the management, which must therefore be pnncipally responsible for the procedure As soon as possible the Prosecutor will nov. inform all the defendants of the modifications of the charges. and .... ia the seized matenal the Prosecutor has now learned who the persons are who appear to ha .... e had the decisive influence on the events. which now leads to charges against Kirsten Larsen. Marlene Gunst. Ruth Sejeme Olsen and possibly Sten Byrner On the other hand. the Prosecutor considers withdrawing the charge against Eva Vestergaard. The Prosecutor has explained the basis of suspicion against the defendant \10gens Arndi Pedersen in the Case SU'mmary produced In the Prosecutor's opinion it may be stated briefly that it is believed that the basic structure concerning the treasury of the Teacher Group. designated LG, is now known. and that information obtained shows that the final control of it lay with what is known as "our office", which appears to be equivalent to Kirsten Larsen and Mogens Amdi Pedersen, in some connections called KiAP. as the top level and with some further specified persons as the next level It is .believed that all the specific projects are known which received suppOrt in the period from 1987 to 1993-94, whereas the newest projects are still being investigated. Further, there are still some interrogations to be made, but in general the investigation is now close to a conclusion. l 'nder tab 42 there is a review of all the so-called LG projects, which are the projects that are conducted for the funds of the Teacher Group. It is dated 16 .A.ugust 1994. and it was found on a computer that was seized at the search at Plagborgvej . It is assumed that the value of these possessions exceeds DJ(}( one thousand m, and it is unknown how much the operation of these prOjects yield. but it is known that lar2e amounts are received on various aCCOUnts every month. The projects are-divided into a number of projects in ;;ca. called the Federation in Africa.. and which involve partly building. f' oductlon of various commodities. and the sale of clothes.· The same :O:~i.es to a number of projects in Europe.' called the Federation in Europe. h re espeCially the collection of clothes and the operation of second-hand ~ ~ps predOminate. In addition to this there is a group called Handelshuset. , n a group called Skolesarnvirket. which mainlv concerns various schools ,n thiS co Th '0 T Untry en there is a group called T\VFE and TWT. which stands r rans World Forest Enterprise and Trans World TradinlZ. Furthermore , ere IS :'arrn . a group called USS , which concerns a large number of projects on 'oper s In vanous COuntries. and in the ProsecuJor ' s opinion these farms are- ' ' For:~e~r on a p,~rely. commercial basis. Then there is a group called 'he ,,, e 19t andet (Miscellaneous). includimz a biolZas plant on Tahiti and . .... In d tu b' ~state r Ine aT Tvind. Finally. the tab covers a survey of the various real Estate. c~m~arues and their possessions. including D S.L Fupp G . have been described. contrary to the L comparues proper, as pm'ate institutions, which are not owned by anyone However, It appears from a I ter dated 16 October 1998, which is produced under tab 34, that Ruth ;\rae Olsen and Marlene Gunst also took a position on the decisive issues eJtheSe companies It appears from a letter of 5 December 1998, which is ~nroduced under the same tab. that Kirsten Fuglsbjerg described in detail what action Poul Jargensen and the Foundation board member Lars Jensen were to take. and it appears that they should make a payment of a mortgage debt Thus it is reasonably well documented .that these companies were on l ~ transiti'on companies. which have lent their names to some transactions, and that they have been inserted as intermediate links only. because as foreign companies they were outside the control of the Danish authorities, which explains that the defendant Poul Jargensen has made incorrect statements about them. Tab 10 includes a further series of letters showing that instructions about these companies were merely given to Poul Jargensen and Lars Jensen, and it appears from a letter of 6 May 1995 that Kirsten FUlZlsbjerg even ordered that a section about Cayman was to be deleted from an -auditor's report . Kirsten Larsen managed this company. The object of these companies should be the safeguarding of nature protection interests. and on page 16 ff, in the Case Summary there is a description of the socalled Malaysia Project, It appears that the plantation in Malaysia is referred to as one of the sources of income to LG ' s treasury. Under tab 4 there is a letter from "KLAP", which, as mentioned, must be assumed to be Kirsten Larsen and the defendant Mogens Arndi Pedersen. and it is assumed that the letter is addressed to Sten Byrner. It appears that they were to inspect a sawmill in Malaysia.. and it is evident that there is a subordination relation and a fundamental financial interest involved Cnder tab 6 there is a letter of 3 Decembe( 1992 from Sten r.vmer to "KLAP", and under item 6 financinlZ in connection with Malaysia is' mentioned The letter seems to indicate that the money granted for the project was spent on acquiring the shares In the sawmill, but there is no direct evidence of this In any case the letters show that Kirsten Larsen and the defendant MO'lens Amdi Pedersen had - ih-e decisive control of the sawmill It is also evident that alZain in connection with this ownership there is the same construction of companies with Fairbank Ltd., Cooper Investments Ltd. and Lyle Enterprises Ltd. at the top of the system. Generally, reference is made to the Case Summary, page 18 if concerning the investilZations of the use of the ' funds IZranted for the project. On page 19 is mentioned among other things that a large amount has not been spent at all, as it is mentioned that an "excess amount" was to be paid back over three years. In addition there are consultancy fees that - 16 .. .ge 10 of 15 , , , ... e been paid to companies constructed under the Tvind Group In the ha already described There IS also the Information that a sum of LSD anner . rn 000 seems to have been paid to a real estate company. where IS was JJO. n acquisition of flats in Miami. while LSD 25.000 was transferred to 5?ent 0 Larsen' s American Express account in !\1iami. :-';othing appears to ~Irsten . . been spent on nature protection. On page 20 ff .In the Case Summary ebio~as plant on Tahiti is described blOgas plant has actually been t e h;re. A producer, who was a personal friend of the defendant ~10gens bUI Jt t .. to stop po II unon. ' .1J11di Pedersen. had been ordered by the aut hontles an d . Iternative seems to have been that the production had to be closed the a . . rant was made of about DKK 5 m tior the proJect. an d It. appears down A g from the letter produced under tab 21 that a large amount was to be returned '0 the Foundation. Under tab 10 there IS a letter of 12 June 1995. and It , ears from this letter that a draft for the accounts for 1991 was attached i:erefo re the accounts seem to be backdated, and it also appears from these counts that a large amount was paid to J. F. Parsons Inc., whereby money ac .. ;n seems to be returned to a Tvind company. However. it is a question. a~~ . fter all. how much weight should be attached to the so-called accounts . ~here are also some loans from the funds to Kirchheiner Bros Ltd which. according to the letter produced under tab 2, has been mentioned as a company in whose name according to section A of the letter an account should be opened in a bank, and in the organisation diagrams under tab 43 the company is found on page 18 as a company that is controlled by Tvind \;a Fairbank Ltd. and CO,oper Investments Ltd. However, the loans seem to . have been paid back. In the Prosecutor's opinion aU applications have been made out in Denmark, and that there has been no nature protection at all connected with this project, which was just intended to secure a commercial enterprise for a single individual, namely Mr. Stein. It is difficult to find any public utility in the project. On page 23 ff. in the Case Summary there is a review of the Floryl project in Brazil. Here it is a matter of approx . DKK 20 m Cnder tab 8 there is a letter from "KLAP" to Kim Bonde .AJ1dersen concerning the object of this project. Electricity production is mentioned, and development of the society, and it must be admitted that 1,000 fully employed people are mentioned, but nowhere in the letter is nature protection mentioned. As already mentioned in the foregoing it was also here a matler of companies operated and controlled from the Tvind Group, and the vouchers produced under the tabs 19-23 show that also here the wording of the applications was very carefully dictated Also in this count the funds from the Foundation seem to have been used for the purchase. L'nder tab 32 a discrepancy is mentioned which the tax authorities fo'und. and it appears from this that Kirsten Fuglsbjerg dictated the answer. It also appears from the letter produced under tab 18 that chartered accountant Erik Ramer Jensen drew attention to the fact that the Foundation must not characterise an amount as a loan, because these were not tax deductible. The solution was renaming the payments, and 'in ' addition to this some ~xpenses have been called "management fee" and "travel expenses" for I Energie Eternelle. regardless of the fact that this is just a company without any activity at all. Under the already mentioned accounts under tab 10 there h: . A 11 Page 11 of 1~ , , IS also a loan to Eastover Properties Ltd . and exactly this has a connectlor. with the previously mentioned letter of 6 \tay 199) from Kirsten Fuglsbjerg. according to which the section about Cayman should be deleted from the auditor' s report It has also been mentioned pre\'lously that 1l appears from a letter produced under tab 23 that an amount was to be used as a mortgage payment Lnder tab 28 there is a letter tha t IS assumec I e' omzinate from the defendant \'10gens 'Amdi Pedersen on the occasion that a ne': management was appointed in connection with the project It IS described that LG has bought labota. and that the production is carned on bv "certain companions". and the letter mentions some purely commerctai objects of the operation ~othing is stated about nature preservation. and the object is clearly a surplus of a commercial operation. In szeneral it is the Prosecutor ' s Impression that the preceding reVle\\ has sho~n that there is probable .cause to suspect that the defendant \10gens t , A.mdi Pedersen has been guilty of the charges described in the foregomg. and that the conditions of a custodial sentence are present The Prosecutor has also estimated that the right moment has now come for taking the defendant into custody. The Prosecutor claims that there is cause for custody pursuant to section 762( 1)( 1) of the Danish Administration of Justice Act. As it appears from the report produced under tab 42. the defendant has not resided at Skork~rvej 6. Ulfborg. which was the address registered with the national registration office as residence up to may this year It must be assumed that for a lo",~ time the defendant has resided preferably in Florida in the Cnited States. -and by a change of address in the national registration office on 25 \'1ay 2001 it was stated that he had departed for Great Britain at an unknown address with a view to emigration He did not reside in Denmark. and it . is not believed that he has taken up residence in Great Britain The only explanation of the change of national register address is that he evaluated that it would be more difficult to obtain extradition with this national register address. and this in itself creates a basis for custody pursuant to section 762( 1)( I) of the Danish Administration of Justice Act. Under tab 42 there is a .letter of 14 August 1999 probably from Poul Jergensen to "KLAP" . and it contains instructions on how to avoid tt e obligation to give evidence ..1J1er that letter there is another-letter headed "LG heading forwards" dealing with plans of leaving Denmark At the same time it must be considered that it is a question of an orgamsation with considerable funds abroad . On this background there are _Ge_rtain reasons for assuming that the defendant will avoid criminal prosecution It must also be assumed that it IS only realistically possible to apprehend the defendant if he is not informed of decision to issue a warrant for arrest and a custodial order. The defendant has access to taking up residence in Tvind' s properties and ships all over the globe. and Tvind owns property in a number of countries with which Denmark as' no extradition aszreements Zimbabwe. among others It is also submitted that the conditions-in sectio~ 762( 1)(3) are fulfilled It follows from the Case Summary that Tvind is constructed as a hierarchiC onzanisat ion. which IS manaszed bv the defendant \togens Amdi Pedersen The ~ersons also charged or ~nder 'suspIcion are a p -.!age 11 of 15 •, , , . urnber of the d~fendant Mogens Amdi Pedersen 's close subordinates who n .ve instructions from him and who must be assumed to be recelnd'ltiOnalh: loval to him The police have learned that in the time after nCo -u e search meetings were held abroad where a number of the defendants th I dinlZ the defendant Mogens Amdi Pedersen have been present, InC babl u - to coordinate the reaction ' "" Apn'1 _ "00 1 to the po I'Ice searc h on -v ~~~hermore the police have learned that th~ defendants have subsequent l ~ F pted systematically to influence witnesses In the ca,se as It IS descnbed artern report- produced under tab 4_. " f rom t hi stat h anum ber It appears In t he ' h b bl'" all - members of the Teacher Group who have conmbuted to t e pro adat-I'on were in the time after the search contacted and asked to si2n a Foun . ' . ment according to which they should declare themselves In agreement ~tate the funds of the Foundation . had been d'Ism'bute d t he way they w~re that The defendant Poul Jergensen.. among others, via a solicitor 10 ~e~ Zealand. has contacted Hans la ~our Andersen" who IS a central witness, d whom the police have earlier wanted to tnterrogate In court The anlicitOr in question has warned him that an action for slander would be ~~oulZht against the witness, claiming damages etc. as a consequence of the state;;'ents about the activity in the Foundation which the witness has made on TV and to the police. Reference is also made to the information in this report from which it appears also that the Tvind management consistently decides how the members of the Teacher Group are to make statements to the authorities in other situations, It is difficult to tell whether the attempt to mfluence the witness Hans .Ia Cour Andersen is a punishable offence. because the relevant rules of law in New Zealand are not known. but it is known now that the defendant . Poul Jergensen is very much a minor .::haracter, and there is no doubt that the defendant Mogens Amdi Pedersen IS the major power factor in the organisation. On the background stated there are certain grounds for assuming that the defendant Mogens Amdi Pedersen will obstruct the course of justice by influencing others The Prosecutor also stated that in continuation of the orders made by the Court on 5 April 2001 on search at among others the defendant Mogens Amdi Pedersen at his assumed actual address, registered residence and business address in Denmark. the police have now learned that the defendant Mogens Amdi Pedersen must be assumed '0' have address. regularly recurrent residence or business address at a number of addresses in the United States. Reference is made in general to the information in the Prosecutor's request. The Prosecutor consequently requests . the Court. pursuant to section 796(2), cf section 794( 1) of the Danish Administration of Justice Act, to order that the Chief Constable in Holstebro, assisted by the CommJssioner of Police, the Section for ' Serious Economic Crime and assisted by the competent judicial authorities in Florida. USA., to ~ffect ~earch of dwellings, computer equipment. other premises. safe-deposit ~ oxes, objects, or vehicles. which the defendant Mogens Amdi Pedersen olsposes of. at the addresses mentioned in the request, with the reservation that until further the p'rosecutor waives the request for a search warrant in -...../ Page 13 of 15 the flats at La Gorce Palace. because it will be reasonable that these searches await the new charges expected to be raised against other persons , The counsel for the defence protested against pre-trial custody. alleging that many exhibits have been reviewed. but that this review shows that the suspicion the Prosecutor relies on in support of the now modified charges IS not sufficiently supported. At least there should be a suspiCIOn that it IS more probable that the defendant will be convicted than that he will be . acquitted. and in the present case it is most likely that the defendant will be acquitted. One or the charges concern complicity. in the Prosecutor" s opinion. to tax fraud on the part of the individual contributors. and in any case this is a very thin charge A Foundation actually existed. and contributions into the Foundation were approved as contributions entitl :1!! to tax deduction. Cnder these circumstances it is not tax fraud to use the rules and the approved Foundation actually in existence, and regardless of the outcome of the case otherwise the contributors must be entitled to the tax deductions in their tax returns . It is quite unlikely to assume that it should be possible to find the defendant guilty on the grounds that the defendant may have assisted in drawing up some documents for this purpose A charge has now been brought for embezzlement. and this involves that the Prosecutor must establish that the defendant has obtained a personal gain of funds from the Foundation, and a charge on such a basis will not· hold. Firstly it has not at all been made plausible that the funds of the Foundation have been misused. It is a case of very broad purposes. and It is not decisive that ' research in a narrow sense has been carried out in IF AS . It appears from clause 2 in the IF AS articles, which have been produced under tab 35, that it is not a matter of research in the everyday .sense. and in the hearing of the case it has actually been brought out that the funds stated have actually been spent on a number of projects. On the existing foundation it is impossible with self-assurance to maintain that this is not research in the required sense. because research may also be the activity of finding new methods. creating new jobs. etc. in the New World by exploiting new principles in a new way. The object of the Foundation is also an object in the nature of a general. public utility, and this does not necessarily have to involve research in the old-fashIoned sense. nor is there certainly any basis for assuming that in a criminal case the Prosecutor will be able to set aside the objects followed as objects that do not fulfil the articles of the Foundation. In the last resort the name is not the decidimt factor. nor is it deciding who the persons are who have influenced th~ implementation of the projects. It is decisive. however, that the projects have been kept within the objects in the ·articles, and it cannot be disproved that this has been the case. The possibility of a profit in the I.ong term does . not make allocation unlawful. because the aim is that hopefully the projects should become self-sustaining. In the long term earnings are not contrary to the objects of the Foundation, nor is it contrary to the objects of the Foundation that a community of interests exists between the Tvind organisation and the organisations that have received the amounts. nor is it contrary to the objects that a number of persons act within both frameworks /6d hV? "--f'age I~ of 15 , 'or is there anything wrong In the possibiht~ that mone~ from the funds may have been loaned The fact to be established is that ultimately the money has not been spent on objects outside the artIcles of the Foundation This is also quite clearly expressed in the legal opInion on the concept of public utility in tax law produced by the counsel for the defence In that respect there is no proof that some amounts have been spent on a flat or a personal account for some individuals. when at the same time it is known that this involves an onzanisationwhich accordinlZ to the Prosecutor himself has assets amounting to thousands of millions These free assets may be placed in objects outside the articles of the Foundation. if it is just done in a responsible manner. and therefore the decisive factor is the general application of the amounts granted When it has been established that the objects pursued are within the framework of the articles. it is not a matter of tax fraud. either. and thereby there is no probable cause to suspect that the defendant is guilty of any of the counts he is charged with Even if the Coun should find that the suspicion should provide cause for custody. there are no such specific causes for assuming that the defendant will evade prosecution that this can constitute the required basis for custody It is an established fact that for 10 - 20 years the defendant has had no permanent residence in Denmark. and it must therefore remain a puzzle why suddenly the defendant must be considered to be a person who will evade prosecution just because he has changed his national register address. which presumably would be easiest to do to an EV country Nor are there specific reasons to assume that the defendant intends to obstruct prosecution. The defendant has hardly been part of the plans of legal action in New Zealand. and there is nothing unreasonable ' in relying on legal remedies in connection with accusations from other persons, and likewise to correspond about this Incidentally. a long time has passed where all the defendants have been able to communicate freely with each other, and if at any time there might have been any cause for assuming that the defendant would decisively influence others. it is certainly not today. Furthermore. the other defendants will still be at large, and as for preventing the defendants from communication in the case. it will not be greatly important to take the defendant into custody - " The Prosecutor stated that the Prosecutor agrees that the legal opinion given is to be understood in the sens~ that the final application of the funds is -the decisive issue in the case, but exactly according to this statement the Prosecutor has demonstrated that this tinal application of the funds has not been in accordance with the articles of the Foundation The Prosecutor. also agrees that a Foundation may well loan money. but that the problem arises when the money is not spent on the purposes for which tax deductions are obtained . According to the condition for pre-trial custody pursuant to section 762( 1)( I) of the Danish Administration of Justice Act it must be considered that the defendant has not in any way reacted as a consequence of approaches in connection with the case, not e~'en as a consequence of approaches from his own counsel. The important issue in connection with section 762( 1)(3) of the Danish Administration of Justice Act is that in connection with the events in ~ew Zealand a signal has been sent to all IiI 1' . . . age I ~ of I ~ , , witnesses that it costs if anyone says too much. and the witness Hans la (our Andersen has a clear impression that the defendant puts pressure on him One may imagine that this creates a pressure on other \.... Itnesses of impol1ance in the case The counsel for the defendant declared that the indications concerning the spending of some specific amounts of the large funds is not sufficient probable cause The defendant has not behaved differently in relation to the mam years where he has shunned publicity. and this cannot be the baSIS of an assumption that he intends to evade prosecution It has in no way been demonstrated that the defendant is the one who is pulling all the strings. and no charge has even been brought against Kirsten Larsen. who in the Prosecutor" s opinion should equally be a leading character. and it might as \\ ell be she who is pulling the strings. Therefore the request for pre-mal custody should not be allowed The counsel for the defence stated that lie protests against the requested search. but he has no comments to this issue. and he can accept that this question is decided on the existing basis The COUI1 reserved the question of custody until an order is made on 18 December 2001 at 10 00 am . The COUI1 reserved the question of search for the order to be made on 8 January 2002 at 10 00 am The case was suspended. The COUI1 adjourned at 1600 pm. Lovbjerg Nielsen. 1 This is certified to be a true copy of the transcript. The Court in RingkBbing. 18 December 2001 On behalf of the Judge {Signature] Grete Malskov Head clerk .. . ?6 DISTRICT OF COLUMBIA, ss: DECLARATION OF CYNTHIA STEWART FRANCISCO I, Cynthia Stewart Francisco, declare and say as follows: I. I am an Attorney Adviser in the Office of the Legal Adviser for the Department of State, Washington, D.C. This office has responsibility for extradition requests, and I am charged with the extradition ·case of Mogens Amdi Pedersen. I make the following statements based upon my personal knowledge and upon information made available to me in the performance of my official duties. 2. -' In accordance with treaty provisions in full force · and effect between the United States and Denmark, the Danish Embassy has submitted a diplomatic note (No. 27.Dan.2, dated March 4, 2002) formally requesting the 'extradition of Mr.· Pedersen. A copy of the diplomatic note is attached to this declaration. 3. The relevant and applicable treaty provisions in full force and effect between the United States and Denmark are found in the Treaty on Extradi tio: 1 between the. United States of America and the Kingdom of Denmark of June 22, 1972, which entered into force on July 31, 1974 (TIAS 7864) and which is attached to this declaration (111972 Extradition Treaty") . II} EXHIB·IT D TIEIHXJ -2- 4. In accordance with Article 19 of the 1972 Extradition Treat y, the Government of the United States provides legal representation in U.S. courts for Denmark in its extradition requests, and Denmark provides legal representation in its courts for extradition requests made by the ' United States. 5. The offenses for which Mr. Pedersen's extradition is sought are covered by Article 2 and Article 3 of the 1972 Extradition Treaty. 6. The documents submitted by the Danish Embassy in support of its extradition request were certified on February 21, 2002, by Stuart A. Bernstein, Ambassador of the United States of America at Copenhagen, Denmark, in accordance with 18 U.S.C. 3190. Mr. Bernstein, at the time of his certification, was the .' principal diplomatic officer of the United States in Denmark. I declare under the penalty of perjury that the foregoing is true and correct to the best of my knowledge. Executed on March ~~, 2002. Francisco Attachments: 1. 2. Copy of Note Copy of Treaty ,Pi . A j' Thursda~ . THE CHIEF CONSrlBLE IN HOLSTEBRO : 0 De..:~mC1er : 00: ~0rreport 1 7500 Holstebro Tel ephone -459610 1..+48 Telefa'\ -45 9610 148- REPORT Re : THE TVIND CASE Subject: Search for Mogens Amdi Pedersen In connection with the international search via Interpol and Schengen. \\ hlcil has been executed today and on 19 December 2001. respectivel;.. the follo\\ing a\3dable des':r1pl l,'11 has been given for the case of Mogens Amdi Pedersen Civil Register No. 090139-16~5 Domicile unknown :\-tale white skin 198 cm tall slender build blue/grey eyes gre~' hair thin-haired/high forehead wears glasses. Passport: Danish nationality passport ~o 10120:::59. issued:::: June :::000. expires:: JUIlt: :::010. Photo anached. [si gned :] Finn Olsen Deputy det. superintendent EXHIBIT t Ex 123m . -- . --. duhl ecu?t" ?..W.. .v .. .. ip?lvm ::e-::: :00: _ l2 r~~~:::: : Cooer"'hagen ~. 03 ,-=--.. -- -"'erpol -:- 961 0 1 Page -./ " 11 :57 20 December 2001 :- ,..., 31 "~e';:-::: I IPea except SCHENGEN countr,i es IP-8S0-00/SUST -e f ere'1ces :-,-er~c ' Sras ill 3 IP .' S3/ZS/DOC 110148 ~ ! =':::J >= r an::e BCN/AEF/BARRI/JNH/1196/2000/STE VERTE Ir.te'c: : Brussels GIB/RT/0-47319/99/1/N/EES Ir.:erpol London E/ES-3D/106188/00 V Ol.' . ategc:y oersor, subject of an international broadcast message _ :0 3rrest and extradition to Denmark "please search for the following ': .'!tr, a ': :e ':. ::>e'sor ~ a rre r= 'st r"lame i s ) 3 :rtn ::ate : Y YVY ,' M M/DD) - P ' ace ::& birth :::: :J ... r,:r y _':" 1 as PEDERSEN Mogens Amdi 1939/01/09 Toender Denmark s=x Male N a~ ' :''''3 !i ty Danls~ ' ::=-': = ~ '.' : : ·r f li-:ie ,: : es:;- , :: t ~ ::,... - ge': " nts =-oto :::e~:: ,' :::_::'!ent(s j ate ': !a:e:)f sS '... e = ~ ;_: -: , - ~ :. -:" 3''1 l r S s 'sna ls ;:; .. d .... ~ofarrestno - " :: :: _ -; :. yes 198 em tall, slender , grey hair, wears glasses no available upon request Danish passport number 101290259 2000/06/22 , Copenhagen 2010/06/22 =~:-:-:rty "'arrej _j~e 3 _, "- -: tJ - , : I • - 5S 384 /2001 18 December 2001 Tne c ity of R lngkoeblng Court Steen Loevbjerg Nielsen 9 years of Imprisonment -= . : a s e - - e :- e" :" - : ,s:ecr:: pol lce / Cenmark have In collaboration With the Office of the " ... - ~·cs=:-.::or f::r SpeCial cconorr lc Crime . for a considerable pertod been 1~1 ::::f 4 \TK - dOLSTEBRO Thu 20 Dec 2001 . 12 ~ Interpol ~005 Oll ->961 1486 Pa.ge 'nvestigating against the part of the Danish "TVINO" school organisation that Inc ludes ' The Humanltanan Foundation for Research and Environmental Protection :::alled "the Fund ". Dunng the period from 1998 ·to 2001, the Fund has donated approximate ly DKK 70 million to be used in different proJects , whIch . accorOlng to .r'"' e ~ o llce do r.ot fall w ith,n the objects ciause of the Fund. In this connection . P=DERSEN , Mo ens Amdi has been charged with vIolation of paragraph 278 . cf aG'c e 286 . subsection 2 of the Danish PenaL CQde dealLn.g with . embezz lement/misapprOpriation of funds of special gross nature and paragrach 289 dealing with tax evasion of speCIal gross· nature . "Tvind" is a world-embracing organisatIon that has its pOint of ongin in Denmark. The organisation undertakes the r un n ing of schools . collecting of clothes, trade , and various forms of bUSinesses PEDERSEN , Mogens Amdi is the founder and Ideologist of "Tvlnd ". For many years , he has had no permanent private address in Denmark. Instead , he has been domiciled at Tvind. On 25 .05 .2001 he reported that he was moving to an unknown address In England , probably with a view to immigrating . l Esp. Interpol Washington : ~ r e police have become acquainted with the fact that "Tvind" owns the following p r oper1l es In Miami . USA: . , t..par.me nt 5302F . 1 Fisher .Island Dr ive , Fisher Island , Miami 33109 2 ) A ::ar.Te 'lt 5352 . 1 C= isher Is land Drive , Fisner Island, M iami 33109 .. 3 ) ~ t"l e apartments TS 2200 , TS4, TS 2206 , TS 2205, The Sterling ReSidences 6 7 6 7 Co :ll ns Avenue , Miami Beach , FL 33140. ~ ) -"e acartments PH 1 and PH 8, L a Gorce Palace, 6301 Collins Avenue . Miami . = or loa . ':'pa rtrM e n: 5302 In particular is supposed to be used by PEDERSEN , Mogens ,.l R C:Ja::::- v ::ommlsslon requesting the arres-: and extradition is at present b~ the court oider ariawill .O-e-fOfWarded-to tl'M! ~a.t~~1 Iss_ed vlltn a copy of a;:-:r. o r·t ,es In the United States soonest possible as well as it Will be forY/arded vi a .J :: : ""'atlc chan~els ·r.e For a LI N C S ' s - :... - :: -;; : :'i e r C :::sseSSlons , "Tvlnd " owns possessIons In F iji and In Z ,mDab "'1e _ 0( : :. se tre o';an lsat lon is the owner of a very large yacht by the name of 3u :ler'y \'~ :::ueen -he present whereabouts of the yacht is unk.nown In the interests of the media attention of this matter, please note the confidentIal nature of this case. J:::! h, CERTIFICATE OF SERVICE BY MAIL 1 2 I, _ _ _ _ _----'RE~G~IN~A~A~U~T~RE~Y~_ _ _ _ _ , declare: 3 4 That I am a citizen of the United States and resident or employed in Los Angeles County, 5 California; that my business address is Office of United States Attorney, United States 6 Courthouse, 312 North Spring Street, Los Angeles, California 90012; that I am over the age of 7 eighteen years, and am not a party to the above-entitled action; That I am employed by the United States Attorney for the Central District of California 8 9 who is a member of the bar of the United States District Court for the Central District of 10 California, at whose direction the service by mail described in this Certificate was made; that on 11 1I _ _ _~A~p~ri~I.=!.2!::!..2,,--,2~0~0~2,-----_ _ , I deposited in the United States mails in the United States 12 Courthouse at 312 North Spring Street, Los Angeles, California, in the above-entitled action, in an 13 envelope bearing the requisite postage, a copy of: UNITED STATES' MEMORANDUM OF 14 POINTS AND AUTHORITIES RE EXTRADITION; DECLARATION OF MATTHEW E. 15 SLOAN; SUPPLEMENTAL DECLARATION OF POUL GADE 16 17 addressed to: Robert L. Shapiro, Esq. GLASER, WElL & SHAPIRO, LLP 2121 Avenue ofthe Stars 18 18 th Floor Los Angeles, California 90067 19 20 at His last known address, at which place there is a delivery service by United States 21 Mail. 22 This Certificate is executed on _ _----"A""""p~n'""-'·1'-..:2=2::..1.,-=2=0=02=---- at Los Angeles, California. 23 I certify under penalty of perjury that the foregoing is true and correct. 24 25 26 27 28 3 q.